1. A service station uses 2500 oil filters during the course of a year, and this usage is constant throughout the year. These oil filters are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost per oil filter per year is $1.50 (or 10% of the unit cost) and the ordering cost is $18.75. There are 250 working days per year. a) What is the service station's optimal order quantity and total annual cost of inventory?
1. A service station uses 2500 oil filters during the course of a year, and this usage is constant throughout the year. These oil filters are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost per oil filter per year is $1.50 (or 10% of the unit cost) and the ordering cost is $18.75. There are 250 working days per year. a) What is the service station's optimal order quantity and total annual cost of inventory?
Chapter6: Proudction Costs
Section: Chapter Questions
Problem 8SQP
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1. A service station uses 2500 oil filters during the course of a year, and this usage is constant throughout the year. These oil filters are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost per oil filter per year is $1.50 (or 10% of the unit cost) and the ordering cost is $18.75. There are 250 working days per year.
a) What is the service station's optimal order quantity and total annual cost of inventory?
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