Question: S 1 2 : ADDITIONAL EXAMPLES Inventory Management Example 1 An electronic manufacturer purchases microprocessors at a cost of $ 3 5 each. Throughout the

S12: ADDITIONAL EXAMPLES Inventory Management
Example 1
An electronic manufacturer purchases microprocessors at a cost of $35 each. Throughout the year, it buys 150,000 units of this microprocessor. Each order is charged $250(setup and delivery cost). The order quantity is 25,000 units. The annual percent holding cost is 25%. The lead time is 6 weeks.
a. How many units of the microprocessors are held in the cycle inventory?
b. How many units of the microprocessors are held in the pipeline inventory?
c. What is the inventory holding cost per year?
d. What is the ordering cost per year?
e. What is the EOQ?
f. What is the (TBO when using the EOQ)?
S12: ADDITIONAL EXAMPLES Inventory Management Example 1 An electronic manufacturer purchases

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