What is total cost for managing the inventory

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Reference no: EM132255518

Introduction: The following information was provided to us by a brownie baker (BB). In an attempt to understand costs. We will use the following information to perform calculations.

BB can buy pans of brownies from a factory for $12 a pan. BB estimates he will sell 3600 pans of brownies per year.

The factory charges an ordering fee of $200 every time he makes an order.

Renting a refrigerated facility to hold the brownies will cost BB $0.55 per pan

BB works 150 days per year.

The lead time is 3 working days.

Provide answers to the following questions. Round your answers up to a whole number. *Please note that you must show your calculations and your solution must indicate the units of measurement.

What is the economic order quantity?

What would his average inventory be?

How many orders will be placed per year?

What is the reorder point?

How many days will there be between orders?

What are his annual setup and holding costs?

What is total cost for managing the inventory?

Reference no: EM132255518

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