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4 . Target purchases home goods made by a supplier in China. Target s stores in the United States sell 2 0 0 , 0
Target purchases home goods made by a supplier in China. Targets stores in the United States sell units of home goods each month. Each unit costs $ and the company has an annual holding cost of percent. Placing a replenishment order incurs clerical costs of
$order The shipping company charges $ as a fixed cost per shipment along with a variable cost of $ per unit shipped. What is the optimal order size for Target? What is the annual holding cost of the optimal policy? How many orders per year does Target place? What is the annual fixed transportation cost? What is the annual variable transportation cost? What is the annual clerical cost?
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