A supplier of car parts produces components at a rate of 80 units per day. The demand
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Question:
A supplier of car parts produces components at a rate of 80 units per day. The demand has been constant for some time now, and one of their customer requires that 15 000 units be shipped to them annually (of 300 working days). Holding costs are R66 per unit per year, and setup costs are R100 per order. 1.4.1 Calculate the order quantity. (3) 1.4.2 How many setups will be made per year? (1) 1.4.3 What will the average inventory level be in the company? (2) 1.4.4 What is the annual cost of setting up and holding inventory?
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