Question
A company uses a product for its operations. The yearly usage is about 6,753 units per year. The company purchases the product from a supplier
A company uses a product for its operations. The yearly usage is about 6,753 units per year. The company purchases the product from a supplier for $36.99 per unit. The order lead time is 9 working days. The company's accountant estimates that the unit holding cost is 4.48 dollars per unit per year. Furthermore, the cost to place a replenishment order and process a shipment is $53 per order. Assume that EOQ model is appropriate for this problem.
Use at least 4 decimal places in calculation and answer. The optimal annual holding cost for the company is __________ dollars per year.
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