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The Hedge Corporation manufactures only one product: planks. The single raw material used in making planks is the dint. For each plank manufactured, 12 dints are required. Assume that the company manufactures 150,000 planks per year, that demand for planks is perfectly steady throughout the year, that it costs $200 each time dints are ordered, and that carrying costs are $8 per dint per year.
a. Determine the economic order quantity of dints.
b. What are total inventory costs for Hedge (total carrying costs plus total ordering costs)?
c. How many times per year would inventory be ordered?
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