Find the optimal ordering schedule

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Reference no: EM132114029

Anticipated demands for a five-month planning horizon are 14, 8, 10, 31 and 15. Current starting inventory is four units, and the inventory manager, Thomas Lee would like to have eight units on hand at the end of the planning horizon. Furthermore, due to previous arrangement Thomas Lee expects to receive from an outside supplier of 5 items at the start of month 2 and 5 items at the start of month 4. Suppose that the item cost $50 each and Thomas Lee estimates a fixed cost of $30 for placing and receiving orders from an outside supplier. Assume that holding costs are based on a 24 percent annual interest rate. Find the optimal ordering schedule.

Reference no: EM132114029

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