Question: Answer Question 3 (this is all relevant information) The demand for GT-branded laptop cases in the campus bookstore is fairly regular throughout the year, at

Answer Question 3 (this is all relevant information)

The demand for GT-branded laptop cases in the campus bookstore is fairly regular throughout the year, at 200 cases per year. The wholesale cost of each laptop case is $50. Assuming a fixed shipping cost of $20/order and a holding cost of $2 per case per year, determine the optimal order quantity, re-ordering interval, and the yearly average costs using the EOQ model.

Assume a year consists of 52 weeks. Also, assume a fixed 4-week lead time for an order (it takes four weeks for the supplier to deliver the cases). What is your on-hand inventory level when you place the order? This value is called the reorder point.

Question 3

Your supplier offers you a 2% per-unit discount for all cases if you order 100 cases or more. Would your optimal order quantity change in such a case? If so, what is the new recommended order quantity and reorder interval?

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