Question: Joe's Book Store stocks the text Introduction to Materials Management by Tony Arnold. The demand for this book is very sporadic depending on when APICS
Joe's Book Store stocks the text "Introduction to Materials Management" by Tony Arnold. The demand for this book is very sporadic depending on when APICS courses are offered and when people start to work on their BSCM certification exam as the chart show. What is the best order quantity if your demand is "lumpy"?
This demand pattern repeats for the whole year. The cost for transportation per shipment is $100, $25 per shipment for brokerage charges, $25 purchasing salaries and expenses. Each book costs $125 and its costs and the inventory carrying cost is 20%.
| Week | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 |
| Net Requirement | 50 | 200 | 42 | 75 | 125 | 65 | 180 | 25 | 75 |
| Planned Order Receipt | |||||||||
| Ending Inventory | |||||||||
| Average Inventory |
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To determine the best order quantity in a situation with lumpy demand we can use the Economic Order ... View full answer
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