Average annual holding costs of the pipeline inventory

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Reference no: EM131031885

The factory needs 1,000,000 light bulbs per day, you have to average no more than $250k in fresh light bulbs in inventory on site.Y our supplier is in China. Your firm "PTP" uses factory gate pricing. It is a 2 day trip from the factory to the port Shensen ( the shipper only ships in groups of 5 containers of production per ship, 3 weeks on route to Seattle and 7 days by rail to your Muncie IN factory. At a value of 50 cents a piece and holding costs of 8% per year. What is the total value of the inventory, What are the average annual holding costs of the pipeline inventory? What do you need to do ( number of containers on site ) to achieve the $250k in in-plant inventory value. Assume the containers hold 1,000,000 light bulbs a piece.

Reference no: EM131031885

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