Question
ETS manufactures a component for its computer products. The annual demand for this component is 2500 units. The annual cost of maintaining inventory is 10%
ETS manufactures a component for its computer products. The annual demand for this component is 2500 units. The annual cost of maintaining inventory is 10% per unit and the cost of preparing an order and setting up production for the order is $ 50. The machine used to make this part has a production rate of 10,000 units per year and the cost is $ 22 per unit. E). A supplier offers to sell a similar component for $ 25 per unit with a charge $ 5 per service per order. Should the company accept the offer? F). Find the average inventory level for each situation
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