Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Lila Battle has determined that the annual demand for number 6 screws is 135,000 screws. Lila, who works in her brother's hardware store, is in
Lila Battle has determined that the annual demand for number 6 screws is 135,000 screws. Lila, who works in her brother's hardware store, is in charge of purchasing. She estimates that it costs $11 every time an order is placed. This cost includes her wages, the cost of the forms used in placing the order, and so on. Furthermore, she estimates that the cost of carrying one screw in inventory for a year is four cents. Assume that the demand is constant throughout the year. 3.1. How many number 6 screws should Lila order at a time if she wishes to minimize total inventory cost? (1 point) 3.2. Suppose the ordering cost is not 11$, and Lila Battle has been ordering 15000 screws each time an order is placed. For this order policy to be optimal, what would be the ordering cost? Show your calculations in the text box and check your results in the table. ( 2 points) 3.3. How many orders should be placed per year? (1 point)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started