Illustrate what is average inventory if costs are minimized

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Reference no: EM1374965

Q. M. Cotteleer Electronics supplies microcomputer circuitry to a business that incorporates microprocessors into refrigerators and or home appliances. 1 of comp1nts has an annual demand of 250 units and this is constant throughout year. Carrying cost is approximate d to be $0.25 per unit per year and ordering cost is $21 per order.

a.) To minimize cost, explain how many units should be ordered each time an order is placed?

b.) Explain how many orders per year are needed with optimal policy?

c.) Illustrate what is average inventory if costs are minimized?

d.) Suppose that ordering cost is not $20.68 and Cotteler has been ordering 175 units each time an order is placed. For this order policy (of Q = 175) to be optimal, determine illustrate what ordering cost would have to be.

Reference no: EM1374965

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