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City Trumpets of Winston-Salem, NC is a distributor of brass trumpets, which are sold to retailers, online music stores, and direct to customers. The trumpets
City Trumpets of Winston-Salem, NC is a distributor of brass trumpets, which are sold to retailers, online music stores, and direct to customers. The trumpets are manufactured in Richmond, VA and currently shipped to Winston-Salem, NC. Todd Camel, vice president of logistics, has asked you to evaluate his overall inventory management system. In order to this, you start with a basic analysis of inventory management you learned at ECU. You have collected the following information. Use it to answer questions 3a, 3b and 3c: Annual demand: 3,600 trumpets (assume 240 working days/year and constant demand) Trumpet value: $1,200 each Inventory carrying cost (annual): 6% Cost per order to replenish inventory: $130 Unit weight: 33 lbs. per trumpet. a) What is the economic order quantity for Camel City Trumpets in units? In pounds? b) Using the EOQ you calculated in part a, what is the total annual cost? c) What is the ROP (assume lead-time is constant at 3 days)
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