What is the optimal number of orders per year

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Reference no: EM132290474

A large manufacturing company has a constant demand for one of its product ABC of 32,000 pieces per year. The cost of placing an order to replenish stock is $10, and the annual cost of holding is $4 per unit. Stock is received 5 days after an order has been placed. No backordering is allowed. Assume 300 working days a year.

a. What is the optimal ordering quantity?

b. What is the optimal number of orders per year?

c. What is the optimal interval (in working days) between orders?

d. What is the annual cost of ordering the product?

e. What is the inventory holding cost of units in a year?

f. What is the total annual inventory holding cost for the EOQ policy? Assume the item cost is C

g. What is the demand during lead time?

h. What is the reorder point?

Reference no: EM132290474

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