Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1.) Lila Battle has determined that the annual demand for number 6 screws is 150,000 screws. Lila, who works in her brother's hardware store is

1.) Lila Battle has determined that the annual demand for number 6 screws is 150,000 screws. Lila, who works in her brother's hardware store is in charge of purchasing. she estimates that it costs $10 every time an order is placed. this cost includes her wages, the cost of the forms used in placing the order, and so on. furthermore, she estimates that the cost of carrying one screw in inventory for a year is 3 cents. assume that the demand is constant throughout the year (30 points).

a.) How many number 6 screws should Lila order at a time if she wishes to minimize inventory costs?

b.) How many orders per year would be placed? What would the annual ordering cost be?

c.) What would the annual inventory cost be?

d.) Draw a plot of annual costs (ordering cost, holding cost, and inventory cost) as a function of order quantity.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The UCAS Guide To Getting Into Economics Finance And Accountancy At University

Authors: Ucas, Targetjobs.Co.UK

1st Edition

9781908077172

More Books

Students also viewed these Accounting questions

Question

Acceptance of the key role of people in this process of adaptation.

Answered: 1 week ago

Question

preference for well defined job functions;

Answered: 1 week ago