Question: ABC company has a demand for 2000 units each year. The cost of each unit is $100. It costs ABC $200 to place an order

ABC company has a demand for 2000 units each year. The cost of each unit is $100. It costs ABC $200 to place an order and

$4 to carry a unit in the stock per year. Further, the supplier needs a week and a half to deliver the order. Assume 50 weeks to a year.

Calculate the Total Annual cost of the system.

D=2000 cases

Co=$200 per order

Ch=$4 /case/year

Q=?

R=?

L=1.5 weeks

P=$100/case

T=?

Ts=?

.

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