Question
A company dealing in one item has a total demand of 120,000 sets per year. The company can buy from two sources with the following
A company dealing in one item has a total demand of 120,000 sets per year. The company can buy from two sources with the following conditions:
Source A: Total production and supply capacity is 600,000 sets per year. Supply is in batches with regular intensity. The cost per order is $200. The price per set is $140. The time from the signing of the purchase contract until the goods are available for sale at the company is 15 days.
Source B: The total capacity is large enough and the supply time is considered negligible. The cost per unit is $138 per set. The cost per order is $210. The order time is 45 days.
The cost of managing the reserve based on the amount of inventory in kind is $2.50/unit.
Request:
- What kind of reserves does this trading company belong to ?
- Please choose the place of purchase with the smallest total cost and calculate the corresponding criteria.
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Step: 1
Given Annual demand D Monthly demand 12 10012 1200 pens 3D Unit prices p 25 dollars Order...Get Instant Access to Expert-Tailored Solutions
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