Satellite emporium wishes to determine optimal order size

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1. Ray’s Satellite Emporium wishes to determine the optimal order size for its best-selling satellite dish (Model TS111). Ray has estimated the monthly demand for this model to be 256 units. This model costs Ray $271 to purchase from his supplier. His annual cost to carry inventory is 12% and he estimates that orders cost $40 to process. What is the total annual cost of holding and ordering these satellite dishes?

2. Ray’s Satellite Emporium wishes to determine the optimal order size for its best-selling satellite dish (Model TS111). Ray has estimated the monthly demand for this model to be 489 units. This model costs Ray $175 to purchase from his supplier. His annual cost to carry inventory is 21% and he estimates that orders cost $26 to process. If Ray used an order quantity of 2000 instead of the optimal order quantity, how much money would he be wasting each year?

Reference no: EM132112407

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