Question: A billiard ball maker must place orders for resin, a raw material for billiard balls. It uses resin at a rate of 120 kilograms each
A billiard ball maker must place orders for resin, a raw material for billiard balls. It uses resin at a rate of 120 kilograms each day, and incurs a cost of $0.4 per kilogram per day to hold inventory. The ordering cost is $150 per order. Lead time for delivery is 4 days. Assume 365 day in a year. If the company uses the order quantity of 400 unit, what is the difference between the number of orders per year for this scenario and the optimal number of orders per year associated with the minimum total cost of ordering and inventory holding?
| 0.1 | ||
| 36.5 | ||
| 101.9 | ||
| 109.5 | ||
| None of the above
|
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