Question: Demand for a book at Amazon.com is 295 units per week. The product is supplied to Amazon from a factory. The factory charges Amazon $10
Demand for a book at Amazon.com is 295 units per week. The product is supplied to Amazon from a factory. The factory charges Amazon $10 per book, while the total cost of shipping an order from the factory to the Amazon, when the shipment size is Q, is given by
Shipment cost = $65 + 2Q
Assume the annual inventory carrying cost is 24 percent.
a-1. What is Amazon's total cost per shipment?
Cost per shipment ______+ ___________Q
a-2. What is the annual holding cost per book? (Round your answer to 2 decimal places.)
Annual holding cost $_______ per book
b. What is the optimal shipment size? (Assuming 52 weeks per year. Round your answer to the nearest whole number.)
Optimal shipment size__________ books
c. What is the average throughput time? (Do not round intermediate calculations. Round your answer to 3 decimal places.)
Average throughput time________ months
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