Question: just question 5 Southeastern Bell Telephone stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these
just question 5
Southeastern Bell Telephone stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 15,000 units. Southeastern Bell estimates its annual holding costs for this item to be $25 per unit. The cost to place and process an order from the supplier is $75. Southeastern Bell operates 300 days per year, and the lead time to receive an order from the supplier is two working days. [NOTE: These are equations you will use a great deal - so calculate them and SHOW ALL THE WORK. Just giving me a numerical answer WILL NOT SUFFICE) 1. Find the Economic Order Quantity (EOQ); 2. Find the annual holding costs; 3. Find the annual ordering costs; 4. What is the reorder point (ROP)? 5. Southeastern Bell knows that the supplier is often backordered (they have not set-up a J-I-T-system) so they may miss a shipment and be a day late. Therefore, they want a safety stock of at least 2 days on hand. Calculate the ROP with a safety stock
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