Question: A supply chain manager is trying to reduce her inventory costs by coming up with better ordering policies. The retail shop sells gaming consoles. One

  1. A supply chain manager is trying to reduce her inventory costs by coming up with better ordering policies. The retail shop sells gaming consoles. One of the consoles has a steady demand and it is fairly steady.

The data is: Demand = 1400 per year; Cost per unit = $400; holding cost = 10% of the unit cost/per year; Ordering cost = $600 per order

  1. Find the EOQ.
  2. Compute the optimal number of orders per year
  3. Compute the total joint costs of holding and ordering costs per year

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