An item is consumed at the rate of 50 items per day. The holding cost per unit per dayis 3 pesos while the setup cost is 25 pesos. Suppose shortage is not allowed and thatthe purchasing cost is 10 pesos per item. However, if the order quantity reaches 100units, a five percent discount per item is given. Determine the optimal inventory policygiven a 10-day lead time.

Answered: 3 pesos while the setup cost is 25…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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3 pesos while the setup cost is 25 pesos. Suppose shortage is not allowed and that e purchasing cost is 10 pesos per item. However, if the order quantity reaches 100 its, a five percent discount per item is given. Determine the optimal inventory policy ven a 10-day lead time.