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What is the periodic interval that orders

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Question - A company manufactures the blades for wind turbines from a glass fiber reinforced plastic. The suppliers of the glass fiber and reinforced plastic send the raw materials to French Wind in cases, where one case of glass fiber requires two cases of reinforced plastic. Glass fiber is being consumed at steady rate of 2000 cases per year and has a cost per case of $1500. Reinforced plastic on the other hand has a unit cost of $300 per case. French wind has a 35% annual holding cost rate on all their inventory. The setup/order cost for glass fiber is $200 while for reinforced plastic there is a $650 order cost. Over the duration of a year French Wind is open for 340 days.

What is the periodic interval that orders have to be made for both raw materials (in days)? Do you think they could share delivery trucks?

Reference no: EM132020713

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