Compute the annual inventory turnover rate

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Reference no: EM13100922

Johnson corporation has the following information about a product that it carries in stock: Average demand= 40 units per day Average lead time= 15 days Item unit cost= $55 for orders of less than 400 units Item unit cost= $50 for orders of 400 units or more Ordering cost=$30 Inventory carrying cost= 20%... The business year is 300 and the standard deviation of demand= 2.5 units and the standard deviation of lead time=1.5days, with desired service level= 97.5% A: What's the annual total acquisition cost of ordering at the price of $55 and $50?... B :What level of safety stock should Johnson maintain for the item? C:If Johnson chooses the ordering policy that results in the lowest total annual acquisition cost , and maintains the safety stock level for 97.5 percent service, what will Johnson's average inventory be for this item? D: what will the annual inventory turnover rate be for this item? E:what will the reorder point be for this item?

Reference no: EM13100922

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