A power plant uses coal to generate electricity. Coal is supplied at a rate of 9,000...

 

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A power plant uses coal to generate electricity. Coal is supplied at a rate of 9,000 tons per day at price of $16.50 per ton and is used at rate of 1400 tons per day. The plant operates 365 days per year and its annual carrying cost is 28% of acquisition cost. Ordering cost is $675 per order. a) What quantity of coal should they order each time? b) What is the maximum inventory level during the year? A power plant uses coal to generate electricity. Coal is supplied at a rate of 9,000 tons per day at price of $16.50 per ton and is used at rate of 1400 tons per day. The plant operates 365 days per year and its annual carrying cost is 28% of acquisition cost. Ordering cost is $675 per order. a) What quantity of coal should they order each time? b) What is the maximum inventory level during the year?

Answer rating: 100% (QA)

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