Question
A manufacturer has a production facility that requires 15,607 units of component JY21 per year. Following a long-term contract, the manufacturer purchases component JY21 from
A manufacturer has a production facility that requires 15,607 units of component JY21 per year. Following a long-term contract, the manufacturer purchases component JY21 from a supplier with a lead time of 10 days. The unit purchase cost is $16.7 per unit. The cost to place and process an order from the supplier is $133 per order. The unit inventory carrying cost per year is 17.2 percent of the unit purchase cost. The manufacturer operates 250 days a year. Assume EOQ model is appropriate. If the manufacturer uses a constant order quantity of 1,782 units per order, what is the annual inventory cost? Use at least 4 decimal places.
Only type writing allow
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started