Question: Tim Madsen is the purchasing agent for Computer Center, a large discount computer store. He has recently added the hottest new computer, the Power model,
Tim Madsen is the purchasing agent for Computer Center,
a large discount computer store. He has recently added the hottest
new computer, the Power model, to the stores stock of goods. Sales
of this model now are running at about per week. Tim purchases
these computers directly from the manufacturer at a unit cost of
$ where each shipment takes half a week to arrive.
Verify your answer for the optimal order quantity obtained inpart d by applying the EOQ formula by hand.f With the optimal order quantity obtained above, how frequentlywill orders need to be placed on the average? Whatshould the approximate inventory level be when each order isplacedg How much does the optimal inventory policy reduce thetotal variable inventory cost per year holding costs plusadministrative costs for placing orders for Power modelcomputers from that for the policy described in part aWhat is the percentage reduction
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