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Mark Luke is the inventory control manager for BCG , which receives metal tubes from Ziscosteels, a small producer of metal parts that can only
Mark Luke is the inventory control manager for BCG which receives metal tubes from Ziscosteels, a small producer of metal parts that can only produce five hundred metal tubes per day. BCG receives metal tubes from Ziscosteels per year, and since BCG operates working days annually, its average daily demand for metal tubes is fifty. The ordering cost for BCG is fourty rands per order, and the carrying cost is sixty cents per tube per year. The question is what is the optimal quantity of metal tubes that BCG should order from Ziscosteels at one time? It is important to note that Ziscosteels has agreed to ship the maximum number of metal tubes it can produce each day to BCG upon receiving an order.
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