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A retailer faces an annual demand for 2,400,000 shirts with the Mumbo Jumbo ManSavior of the Universe logo. It costs $450 to place a single
A retailer faces an annual demand for 2,400,000 shirts with the "Mumbo Jumbo ManSavior of the Universe" logo. It costs $450 to place a single order and the costs for keeping a single shirt in stock for an entire year are 0.60$.
(a) How many units should the retailer order each time an order is placed and what are the associated costs?
(b) Given the result under (a), how many orders should be placed and what is the time between two consecutive orders (given a 360-day year)? What is the reorder point if the lead time were 20 days?
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