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Ninja is a major manufacturer of Air Fryers. It purchases motors from Honda Corporation. Annual demand is 52,000 motors per year or 1,000 motors per
Ninja is a major manufacturer of Air Fryers. It purchases motors from Honda Corporation. Annual demand is 52,000 motors per year or 1,000 motors per week. The ordering cost is $360 per order. The annual carrying cost is $6.50 per motor. It currently takes 2 weeks to for the assembly plant to receive an order from Honda.
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- What is the optimal number of motors that Ninjas managers should order according to the EOQ model?
- At what point should managers reorder the motors, assuming that both demand and purchase-order lead time are known with certainty?
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