Question: Forecasted sales level - 12000 units Average order costs per unit - 1500 USD per order with average order units 1000 Warehouse costs per unit
Forecasted sales level - 12000 units Average order costs per unit - 1500 USD per order with average order units 1000 Warehouse costs per unit - 15 USD; Purchase price - 560 USD; Average money market interest rate 8%; Time of one order from producer-3 days; Safety stock being maintained for 5 business activity days Calculate total inventory costs; Calculate total inventory cost using Economic Order Quantity and thus calculate: Number of orders Time of inventory equilibrium (frequency of deliveries) Total inventory costs Calculate alarm stock; Calculate total inventory costs when the firm can use price discount in the amount of 550 USD with purchases over 4000 units
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