Question: Demand for a book at Amazon is 250 units per week (assume 50 weeks per year). The book is supplied to Amazon from the book

Demand for a book at Amazon is 250 units per week (assume 50 weeks per year). The book is supplied to Amazon from the book publisher for $10 per book plus the cost of shipping the order. The shipping has a fixed cost of $50 per order and a variable cost of $2 per book shipped. So, the cost for the books is $12 per book, plus $50 times the number of orders placed. Assume the annual inventory carrying cost is 20 percent. a. What is the annual holding cost per book? Note: Round your answer to 2 decimal places. b. What is the optimal shipment size? Note: Assuming 50 weeks per year. Round your answer to the nearest whole number. c. What is the average throughput time? Note: Do not round intermediate calculations. Round your answer to 3 decimal places
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
