INVENTORY MODEL

Samsung Electronics requires 25 transistors per month to make colored TV sets. The monthly storage cost is P2.00 per transistor and every time an order is placed, it cost Samsung P4.00.

1. If orders are filled immediately and no shortages are permitted, how many orders are to be made?

2. Of what size should be placed every month?

3. What is the monthly total cost of this inventory policy?

4. How much will be the ordering cost & carrying cost ?