Calculate average time unit spends in inventory

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Reference no: EM133621131

Question

Guitar Center (GC) purchases USB audio interface units from its supplier for a cost of $23 per unit. The lead time to receive an order from the supplier is 18 days. Guitar Center incurs a fixed order cost of $1,714 each time it places an order regardless of the number of units ordered. Demand for the audio interface units at the warehouse is constant at 368 units per week. The holding cost per unit per year at the DC is 23% of the per unit purchase cost. Guitar Center currently orders 509 units in each order. Assume Guitar Center operates 7 days per week, 52 weeks per year, and 364 days per year. Calculate the average time a unit spends in inventory for the current order quantity.

Reference no: EM133621131

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