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1 . To produce cat foods, we need to order ingredient X from a global supplier. X is ordered in large barrels and is used
To produce cat foods, we need to order ingredient X from a global supplier. X is ordered in large barrels and is used at the rate of barrels per year. Each order that is placed with the supplier costs $ to process. Storage space is at a premium on the manufacturing floor and out in the yard, so their annual cost to hold inventory is $ per barrel. Lead time is days.
a What is the best order quantity?
b What is the total cost including holding cost and ordering cost
c What is the reorder point?
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