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Annual demand for canola oil is 15000 liters. The store incurs an ordering cost of $100 per order; while the store incurs a carrying
Annual demand for canola oil is 15000 liters. The store incurs an ordering cost of $100 per order; while the store incurs a carrying cost of $2 per litre per year. The store operates for 320 days in a year. Determine the following. a. Optimal order quantity b. The number of orders per year. c. The total minimum annual inventory costs d. Cycle time in days. e. What is the reorder level if the lead time is 5 days. f. In general, what is the relationship between i) the order quantity and carrying cost ii) the order quantity and ordering cost
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