Question
Pam runs a mail-order business for gym equipment. Annual demand the treadmill is16,000 units. The annual holding cost per unit is $2.50 and the cost
Pam runs a mail-order business for gym equipment. Annual demand the treadmill is16,000 units. The annual holding cost per unit is $2.50 and the cost of placing an order is $50 per order. Answer the following questions: (a) How many treadmills should Pam order, each time she places an order. (b) How many orders should she place in a year? (c) How many treadmills should Pam be holding in inventory when she places an order for additional units, if delivery takes 10 days? (d) How many treadmills should Pam hold in inventory during a year, on average?
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