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Items purchased from a vendor costs INR 20/- each, and the forecast for next year's demand is 1000 units. If it costs INR 5/- every
Items purchased from a vendor costs INR 20/- each, and the forecast for next year's demand is 1000 units. If it costs INR 5/- every time an order is placed for more units, and the storage cost is INR 4/- per unit per year. The lead time is 5 days and the annual working days is 200. Compute the following (a) What quantity should you be ordering each time? (b) What is the total annual inventory cost? (c) What is the reorder level in terms of units? (d) What number of orders are to be made in the year?
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