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What quantity needs to be ordered to minimize cost

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Reference no: EM132538145

Question - Christina Motor Company uses 15750 (Yearly Demand) air filters during the span of a year, and this usage is relatively constant throughout the year. These air filters are bought form a supplier 150 miles away for $25 each, and it takes 5 days from ordering to receipt. The holding cost per unit per year is 22% of the unit cost and the ordering cost per order is $47. There are 210 working days per year.

Required -

a. What quantity needs to be ordered to minimize cost?

b. What is the average inventory?

c. About how many orders per year would be placed?

d. What is the annual total cost of inventory?

e. What is the lead time?

f. What is the Re-ordering point? What does it mean?

Reference no: EM132538145

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