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ABC purchases 10,000 parts a year at a cost of $10 per part. These parts are used evenly throughout the year on a 300-day-per-year basis. It costs ABC $50 to place a single order and $0.50 to carry one part in inventory for a year.
The supplier of these parts usually delivers the parts within 10 days. Sometimes delivery can take as long as 12 days.
Delivery Time
(Days)
Percentage of
Occurrence
10
85
11
12
5
The maximum usage in any one-day is 60 and the minimum 40.
REQUIRED
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