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(1) Haworth is a manufacturer of office furniture. Production of their office desk line requires a metal bracket, which is purchased from a third party
(1) Haworth is a manufacturer of office furniture. Production of their office desk line requires a metal bracket, which is purchased from a third party supplier. Haworth produces desks at a constant rate. This will require 13000 brackets annually. Ordering costs are $60 per order. Holding costs are 22% of the value of the inventory. Haworth has 325 working days per year and a lead-time of 5 days. The standard deviation for daily demand is 6. Answer the following inventory policy questions: (i)What is the reorder point if Haworth wants a 99% service level? The supplier has informed Haworth that it can offer the following quantity discounts Quantity Price 1-6999 $5.75 7000-9999 $5.60 10000-12999 $5.55 13000 and above $5.53 (ii) Based on this information, what quantity should Haworth choose when making orders? This is an Inventory Management
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