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The historical seasonal pattern of wholesale citric acid prices are shown in the table. Assume you want to use hand-to-mouth strategy and order every two
The historical seasonal pattern of wholesale citric acid prices are shown in the table. Assume you want to use hand-to-mouth strategy and order every two months. Inventory holding charge is h=$550/ton/year, order setup cost is k = $200/order, demand D=10,000 tons/month. Month Price ($/ton) Jan 2,480 Feb 2,149 Mar 1,818 Apr 1.488 1,157 May Jun 827 Jul 827 Aug Sep Oct 1,157 1,488 1,818 2,149 Nov Dec 2,480 For this hand-to-mouth strategy, please specify the following: Your order size: units Order setup cost: $ Average inventory over a year: units Annual inventory related cost (excluding item cost): $
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