Question: City Electronics Inc. stocks a certain adapter at its central warehouse for supplying field service offices. The yearly demand for this adapter is 15,000 units.
City Electronics Inc. stocks a certain adapter at its central warehouse for supplying field service offices. The yearly demand for this adapter is 15,000 units. The company estimates its holding cost for this item to be $20 per unit per year. The cost to place and process an order from the supplier is $15. The company operates 360 days per year, and the lead time to receive an order from the supplier is 2 working days. The company wants to use the economic order quantity (EOQ) approach.City Electronics Inc. stocks a certain adapter at its central warehouse for supplying field service offices. The yearly demand for this adapter is 15,000 units. The company estimates its holding cost for this item to be $20 per unit per year. The cost to place and process an order from the supplier is $15. The company operates 360 days per year, and the lead time to receive an order from the supplier is 2 working days. The company wants to use the economic order quantity (EOQ) approach.
How many orders would be expected in a year?
What is the expected time between orders?
What is the reorder point?
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts