Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A manufacturer has a production facility that requires 13,054 units of component JY21 per year. Following a long-term contract, the manufacturer purchases component JY21 from

image text in transcribed
A manufacturer has a production facility that requires 13,054 units of component JY21 per year. Following a long-term contract, the manufacturer purchases component JY21 from a supplier with a lead time of 9 days. The unit purchase cost is $30.3 per unit. The cost to place and process an order from the supplier is $182 per order. The unit inventory carrying cost per year is 12.8 percent of the unit purchase cost. The manufacturer operates 250 days a year. Assume EOQ model is appropriate. If the manufacturer uses a constant order quantity of 2,320 units per order, what is the annual holding cost? Note: It is important to know that the manufacturer does not really use the optimal order quantity. Use at least 4 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_2

Step: 3

blur-text-image_3

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

Modern Database Management

Authors: Heikki Topi, Jeffrey A Hoffer, Ramesh Venkataraman

10th Edition

0132998440, 9780132998444

More Books

Students also viewed these General Management questions

Question

What are your options besides a rote memory approach?

Answered: 1 week ago