Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year.
Question:
Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year.
a. State the order quantity and reorder point.
b. Determine the annual holding and order costs.
c. If a price break of $ 50 per order was offered for purchase quantities of over 2,000, would you take advantage of it? How much would you save annually?
Transcribed Image Text:
Standard deviation of weekly demand Lead time Service probability $10.00 Item cost Order cost Annual holding cost (%) Annual demand Average demand 25 per week $250.00 33% of item cost 25,750 515 per week 1 week 95%
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a 197523 1975 From Standard normal distribution z 164 5151 16425 556 b ...View the full answer
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Related Book For
Operations and Supply Chain Management
ISBN: 978-0078024023
14th edition
Authors: F. Robert Jacobs, Richard Chase
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