Estimaitng the cost of ordering and management

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Reference no: EM1315568

Norris Harrell's Houston Computer Store sells the $ 200 printer. The demand for this is constant throughout year, and annual demand is forecast at 600 units. The management cost is $ 20 per unit per year, but the cost per order is $ 60. Presently, company ordered 12 times a year (50 units each). There are 250 days a year and lead time is 10 days.

a) Provided the present policy of order 50 units at once, state the total annual cost of ordering the annual cost of the operation?

b) If company utilizing the best inventory policy, what would be the total cost of ordering and management?

c) Explain the reorder point?

Reference no: EM1315568

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