You are the operations manager of a firm that uses the continuous review inventory control system. Suppose the firm operates 252 days a year and has the following characteristics for its primary item:

Demand = 25,000 units/year

Ordering cost = $14/order

Holding cost = $4/unit/year

Lead time = 4 days

Standard deviation in daily demand = 1 units

What is the optimal (expected) number of orders (N) per year (to the nearest whole number)?

Your Answer: