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B&H needs to decide how to manage its inventory of cameras. The demand for cameras at B&H is 2 0 0 cameras per week. Each
B&H needs to decide how to manage its inventory of cameras. The demand for cameras at B&H is cameras per week. Each time that B&H places an order for a new shipment of cameras, it must pay $ in fixed processing fees. A camera costs B&H $ to purchase. The cost for B&H to hold a camera in its store for one week is $ Assume that the lead time for the delivery of a camera is weeks.
Suppose that B&H places orders for cameras in quantities of cameras at a time and places a new order for cameras each time that it runs out. Draw a graph showing the number of cameras that B&H has onhand in inventory at each point in time up until the time when it places its fourth order. Label the points in time at which B&H places a new order. Assume that B&H places its first order for cameras on day
Suppose again that B&H places orders for cameras at a time. What will be B&Hs average holding costs per week? What will be B&Hs average fixed ordering costs per week?
What is the optimal number of cameras for B&H to order each time that it places an order? Assuming that B&H orders according to its optimal ordering quantity EOQ what will be B&Hs average fixed ordering costs over the course of a week? What will be B&Hs average holding costs over the course of a week?
Suppose now that the lead time for the delivery of a shipment of cameras increases to week. Assuming that B&H orders according to its optimal order quantity from part c above, what should be B&Hs reorder point for a shipment of cameras?
Suppose that the lead time for the delivery of cameras is still week. However, rather than placing an order when B&Hs inventory of cameras reaches its reorder point calculated in part d above, B&H decides to place a new order for cameras whenever it has cameras in inventory. How much additional holding costs over the EOQ holding costs will B&H incur as a result of this ordering policy? Suppose that B&H orders according to the EOQ level each time that it places an order.
Extra Credit Suppose now that the lead time for the delivery of a shipment of cameras increases to week. Assuming that B&H orders according to its optimal order quantity from part c above, what should be B&Hs reorder point for a shipment of cameras? Explain carefully your answer.
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