Reference no: EM131439298
Question: For inventory problems, the cost is a function of the order size. A company has collected the following data for one of its product.
- Annual requirement, R = 12,000
- Ordering cost per order, S = 150
- Cost per unit, C = 4
- Carrying cost per unit, I = 0.20
- Quantity ordered per order, Q = 100
Develop a general model for computing ordering cost, carrying cost, and total cost functions. Use the following formulas:
- Ordering cost = (R/Q)*S
- Carrying Cost = (Q/2)*I*C
- Total Cost = Ordering cost + Carrying Cost
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