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Demand for a leather tote bag at Leatherology is constant at 5,530 units per year. Leatherology purchases the bags from its supplier for a cost
Demand for a leather tote bag at Leatherology is constant at 5,530 units per year. Leatherology purchases the bags from its supplier for a cost of $129 per unit. The lead time to receive an order from the supplier is 8 days. Leatherology incurs a fixed order cost of $916 each time it places an order regardless of the number of units ordered. The holding cost per unit per year is 21% of the per unit purchase cost. Leatherology currently orders 337 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 annual cost of ordering for the current 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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