Question
A buys 200,000 motors per year from a supplier that can fulfill orders within 2 days of receiving them. A transmits its orders to this
A buys 200,000 motors per year from a supplier that can fulfill orders within 2 days of receiving them.A transmits its orders to this supplier electronically, so the lead time to receive orders is exactly this fulfillment time.The company's order cost is about $70 per order and its carrying cost is about $4 per motor per year.The firm maintains a safety stock of motors equal to 9 days of usage.Assume a 365-day year.
Calculate the company's total inventory cost at the EOQ.Give your answer in dollars, rounded to the nearest whole number.Do not include comma separators in your answer.Do not round intermediate calculations.(Hint: Solving this problem in Excel is likely to be the best approach.)
Please give step-by step answers. Thank you.
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