Determine the optimal amount of particular inventory

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Reference no: EM131525282

Firm CFT is trying to determine the optimal amount of a particular inventory item to carry in its warehouse. CFT tends to sell 1,200 units a year, with each unit costing $1,200 and an additional carrying cost of $300.

1. How many units should CFT optimally hold in its inventory? Round the answer to two decimal places.

_____ units

2. The supplier will only ship 100 units at a given time. Consequently, CFT wants to manage its carrying cost to accommodate this constraint. What carrying cost would make 100 units the optimal quantity? Round your answer to the nearest dollar.

$_______

3. CFT finds that it can only reduce carrying cost to $300. What per unit cost would make 100 units the optimal amount to hold in inventory? Round your answer to the nearest dollar.

$ ______________

4. Would it make sense for CFT to negotiate with its supplier for this price?

Yes or no

Reference no: EM131525282

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