The annual demand for an item of inventory is 125 units. The item costs $200 a unit
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Question:
The annual demand for an item of inventory is 125 units. The item costs $200 a unit to purchase, the holding cost for one unit for one year is 15% of the unit cost and ordering costs are $300 an order. The supplier offers a 3% discount for orders of 60 units or more, and a discount of 5% for orders of 90 units or more.
What is the cost-minimizing order size?
Suppose the monthly consumption is 12 units and the lead time is 3 months. What should be the reorder level in this case?
Related Book For
Statistics Data Analysis And Decision Modeling
ISBN: 9780132744287
5th Edition
Authors: James R. Evans
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