Question: Assume EOQ model is approriate. What is the optimal number of orders per year? A manufacturer has a production facility that requires 10,975 units of
Assume EOQ model is approriate. What is the optimal number of orders per year?
A manufacturer has a production facility that requires 10,975 units of component JY21 per year. Following a long-term contract, the manufacturer purchases component JY21 from a supplier with a lead time of 14 days. The unit purchase cost is $29 per unit. The cost to place and process an order from the supplier is $195 per order. The unit inventory carrying cost per year is 17 percent of the unit purchase cost. The manufacturer operates 250 days a year. Assume EOQ model is appropriate. What is the optimal number of orders per year? Use at least 4 decimal places
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