Reference no: EM131810618
Lila Battle has determined that the annual demand for number 6 screws is 100,000 screws. Lila, who works in her brother’s hardware store, is in charge of purchasing. She estimates that it costs $10 every time an order is placed. This cost includes her wages, the cost of the forms used in placing the order, and so on. Furthermore, she estimates that the cost of carrying one screw in inventory for a year is one-half of 1 cent. Assume that the demand is constant throughout the year.
1. To minimize total inventory cost, Lila should order number 6 screws per order. (Please round to an integer and include no units.)
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2. Based on the calculation in Question 1, Lila needs to make orders per year.
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3. Based on the calculation in Question 2, Lila's total ordering cost is per year. (Please round to a whole dollar.)
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4. Based on the calculation in Question 1, Lila's average inventory is . (Please round to an integer and include no units.)
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5. Based on the calculation in Question 4, Lila's total holding cost is per year. (Please round to a whole dollar.)
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