Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastest-moving inventory item has

image text in transcribed
Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastest-moving inventory item has a demand of 6,100 units per year. The cost of each unit is $103, and the inventory carrying cost is $9 per unit per year. The average ordering cost is $31 per order. It takes about 5 days for an order to arrive, and the demand for 1 week is 122 units. (This is a corporate operation, and there are 250 working days per year). a) What is the E00? units (round your response to two decimal places). b) What is the average inventory if the E00 is used? units (round your response to two decimal places). c) What is the optimal number of orders per year? orders (round your response to two decimal places). d) What is the optimal number of days in between any two orders? days (round your response to two decimal places). e) What is the annual cost of ordering and holding inventory? $[: per year (round your response to two decimal places). f) What is the total annual inventory cost, including the cost of the 6,100 units? $ per year (round yourresponse to two decimal places)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essentials of Management

Authors: Andrew J. DuBrin

9th Edition

538478233, 2900538478235, 978-0538478236

More Books

Students also viewed these General Management questions