Question: help me with the following problem A subcontractor agrees to supply diesel engines to a truck manufacturer at the rate of 25 per day. There
help me with the following problem A subcontractor agrees to supply diesel engines to a truck manufacturer at the rate of 25 per day. There is a clause in the contract that fines you $10 per engine, per day that you miss the predetermined delivery date. The subcontractor finds the cost of keeping a complete motor in warehouses at $16 per month. The production process for it is such that every month (30 days) a group of engines starts in the workshops, and all these engines are available for delivery at any time after the end of the month. What should your inventory level be at the beginning of each month. 1. What should your inventory level be at the beginning of each month (for example, immediately after the engines made in the previous month have been brought into storage, and after the engines have been restocked to meet the unmet demand from the previous month? 2. The cost associated with that policy
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