Question: Custom Computers Ine, (CC1) assembles computers to order and takes pride in their short lead times. One tem they use cormorily in almost ail thein

Custom Computers Ine, (CC1) assembles computers
Custom Computers Ine, (CC1) assembles computers to order and takes pride in their short lead times. One tem they use cormorily in almost ail thein products is a special CPU coolor. They can't ship a computer without a CPU cooler, which they purchaco for $12 por unit Annual demand is 5 .200 inits. and the company works all 52 weeks of the year. The lead time for the CPU cooles is one week. To avoid shortages, they created a conservative inventory replenizhment plan for this item, with a reorder point of 300 units and an ordet quarnty of 1,300 . More spocifcally, they plase an ordet for 1,300 units every time their inventocy drops to 300 units. and receive delivety one week latet. Holding cost is $3 per unit per year and ordering cost is. 533 per ordor. a) Calculate the total (ordering plus holding) annual cost of this pollicy. Hint: the current re-order point is too high, and it increases invertory helding Bake sure your annual holding cost caiculation captures that. b) A closer analysis of demand revesis that the standard deviation of weokly demand is 8.5 units. Keeping a safety slock of orily 20 units would provide a comfortable 99% vervice lovel. They want to use this result to create a nerw invertory replenishment plan with a reorder point of 120 units and the EOQ (which you need to calculate) so thoy place an order for EOQ units overy time their inventory drops to 120 units Hint you can round the EOQ to the nearest whole number or even to the nearest multiple of 10 . Calculate the fotal (ordering plus holding) annual cost of this policy

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