What is the average inventory if costs are minimized

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Reference no: EM133010246

Problem: Patterson Electronics supplies microcomputer circuitry to a company that incorporates microprocessors into ref rigerators and other home appliances. One of the components has an annual demand of 250 units, and this is constant throughout the year. The carrying cost is estimated to be $1 per unit per yeah and the ordering cost is $20 per order.

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

b. How many orders per year are needed with the optimal policy?

c. What is the average inventory if costs are minimized?

d. Suppose the ordering cost is not $20 and Patterson has been ordering 150 units each hme an order is placed. For this order policy to be optimal, what would the ordering cost have to be?

Application assignments require solving problems torn the textbook. You may use OM for onWindows, Excel OM, or Excel to solve the problems. The answers must be submitted to the in a Microsoft Word or Microsoft Excel file, depending upon the preference of your instructor. You must state your answers within a complete sentence so that your understanding of applying the results of the compNations can he observed.

Reference no: EM133010246

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