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What is the total Annual inventory cost

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Question - Christina motor Company uses 7200 (Yearly Demand) air filters during the span of a year, and this usage is relatively constant throughout the year. These air filters are bought from a supplier 400 miles away for $50 each unit and it takes 10 days from ordering to receipt. The carrying cost per unit per year is 25% of the unit cost and the ordering cost per order is $27.50. There are 300 working days per year.

Required -

a. What is the Economic Order Quantity (round to the nearest whole number)?

b. What is the average inventory?

c. About how many orders per year would be placed (round to the nearest whole number)?

d. What is the total Annual inventory cost (Not just the total annual ordering and holding, but also including purchased cost of air filter)?

e. What is the Lead-time?

f. What is the Re-ordering point?

Reference no: EM132534052

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