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Charlene Baker, owner/CEO of Quicktime Cooking, manages all of the sourcing and sales for her company from her home office. Charlene's most popular product, the
Charlene Baker, owner/CEO of Quicktime Cooking, manages all of the sourcing and sales for her company from her home office. Charlene's most popular product, the "Quick Chef Cooker," sells at an average pace of 12,500 cookers per month. Each cooker costs Charlene $100. The annual carrying cost for each cooker is 10 percent. Each order that Charlene places for the "Quick Chef Cooker costs $300, covering clerical and delivery expenses. The order lead time is 6 days and Quicktime Cooking is open for business 365 days per year. 6. What is the economic order quantity? 7. What is the annual order cost? 8. What is the annual carrying cost? 9. At what inventory level should Charlene place an order? 10. Charlene has the option of buying in quantities of 4,000 at a price of $95 per unit. Should she take advantage of this option? Why or why not
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