What is the average inventory if costs are minimized

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Flemming Accessories produces paper slicers used in offices and in art stores. The minislicer has been one of its most popular items: Annual demand is 6,750 units and is constant throughout the year. Kristen Flemming, owner of the firm, produces the minislicers in batches. On average, Kristen can man-ufacture 125 minislicers per day. Demand for these slicers during the production process is 30 per day. The setup cost for the equipment necessary to produce the minislicers is $150. Carrying costs are $1 per minislicer per year. a. How many minislicers should Kristen manufacture in each batch? b. How many orders per year are needed with the optimal policy? c. What is the average inventory if costs are minimized? d. If lead time is 2 days, what should be the re-order point? e. What will the minimum total annual cost?

Reference no: EM131040413

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