What is the total annual cost of your policy

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Reference no: EM131729917

Use the following scenario to answer the next three questions:

Annual demand for an item is 3,000 units. The holding cost rate is 28% of the item cost. Ordering costs are $15 per order. Quantity discounts are available according to the schedule below:

Quantity Price per Unit ($)

1-99 90.00

100-299 89.80

300-399 89.70

400+ 89.60

1. What is the optimal order quantity? If necessary, round to the nearest whole number.

100

299

400

2. From the previous problem, what is the total annual cost of your policy?

~$169,557

~$271,107

~$299,209

~$329,432

3. Assume 52 5-day weeks per year. If the lead-time is 2 week, what should the reorder point be? If necessary, round your final answer UP to the nearest whole number.

104

116

Please show all work.

Reference no: EM131729917

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