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Demand for a leather tote bag at Leatherology is constant at 6,617 units per year. Leatherology purchases the bags from its supplier for a cost
Demand for a leather tote bag at Leatherology is constant at 6,617 units per year. Leatherology purchases the bags from its supplier for a cost of $135 per unit. The lead time to receive an order from the supplier is 10 days. Leatherology incurs a fixed order cost of $2,060 each time it places an order regardless of the number of units ordered. The holding cost per unit per year is 20% of the per unit purchase cost. Leatherology currently orders 234 units each time it places an order. Assume the firm operates 7 days per week, 52 weeks per year, and 364 days per year. Calculate the optimal total annual relevant cost associated with the optimal order quantity. Carry your calculations to at least 3 decimal places. Enter your answer rounded to one decimal place (nearest tenth)
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