The optimal order size, The TransCanada Lumber Company and

The optimal order size

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Reference no: EM132236198

The TransCanada Lumber Company and Mill processes 10,000 logs annually, operating 250 days per year. Immediately upon receiving an order, the logging company’s supplier begins delivery to the lumber mill at the rate of 60 logs per day. The lumber mill has determined that the ordering cost is $1600 per order, and the cost of carrying logs in inventory before they are processed is $15 per log on an annual basis.

a. The optimal order size?

Reference no: EM132236198

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