1. The demand for a subassembly used in the production of a camera is expected to...

 

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1. The demand for a subassembly used in the production of a camera is expected to be as follows during a future 12-month period: Month 1 123456 6 Demand, units 180 220 190 140 270 210 Month 7891010 12 Demand, units 130 360 110 280 250 160 The subassembly is used at a uniform rate during any one month. The order cost is $58 per order. The unit purchase price is $5 for lot sizes of less than 500 units and $ 4.90 for lot sizes of 500 or more units. Annual carrying costs per unit of inventory are approximately 30 percent of the unit purchase price. The lead time is one week. The entire order for the subassembly is delivered at one time. Three ordering rules have been proposed. These are that the order quantity should be equal to.. Which of these proposals will be found to be the most economical on the basis of an annual cost comparison? 1. The demand for a subassembly used in the production of a camera is expected to be as follows during a future 12-month period: Month 1 123456 6 Demand, units 180 220 190 140 270 210 Month 7891010 12 Demand, units 130 360 110 280 250 160 The subassembly is used at a uniform rate during any one month. The order cost is $58 per order. The unit purchase price is $5 for lot sizes of less than 500 units and $ 4.90 for lot sizes of 500 or more units. Annual carrying costs per unit of inventory are approximately 30 percent of the unit purchase price. The lead time is one week. The entire order for the subassembly is delivered at one time. Three ordering rules have been proposed. These are that the order quantity should be equal to.. Which of these proposals will be found to be the most economical on the basis of an annual cost comparison?

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The order quantity should be equal to the average monthly demand ... View the full answer