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A manufacturer has a production facility that requires an average of 15,054 units of component JY21 per year. Following a long-term contract, the manufacturer purchases
A manufacturer has a production facility that requires an average of 15,054 units of component JY21 per year. Following a long-term contract, the manufacturer purchases component JY21 from a supplier with an average lead time of 29 days. The unit purchase cost is $23.4 per unit. The cost to place and process an order from the supplier is $194 per order. The unit inventory carrying cost per year is 13.9 percent of the unit purchase cost. To reduce the chance of shortage, the manufacturer keeps a safety stock sufficient to meet a 6 days' demand. The manufacturer operates 250 days a year. If the manufacturer uses a constant order quantity of 1,261 units per order, what is the total annual inventory and purchase cost? Use at least 4 decimal places
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