Question
You are in change of inventory for a manufacturing company, and you are given the following information: Table 3: Inventory Characteristics Average Annual Demand 7800
You are in change of inventory for a manufacturing company, and you are given the following information:
Table 3: Inventory Characteristics
| Average Annual Demand | 7800 |
| Standard Deviation for Annual Demand | 2600 |
| Leadtime | 2 weeks |
| Holding or Carrying Cost | 15% per year |
| Fixed Delivery Cost per Shipment | $200 |
| Price (value) per Item | $80 |
| Stockout cost per Item | $20 |
| Probability of being in stock during leadtime | 85% |
5 What is your optimal economic order quantity (integer)?
6 What is the reorder point? (Convert d to weeks.)
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Fundamentals of Investments Valuation and Management
Authors: Bradford D. Jordan, Thomas W. Miller
5th edition
978-007728329, 9780073382357, 0077283295, 73382353, 978-0077283292
