Amber Pvt Ltd sells 240,000 stools per year. Based on the company's policy, a safety stock of 4 percent from yearly sales is to be maintained. The carrying cost is $0.50 per unit annually and the ordering costs are $180. The delivery time is 10 days. Order should be placed in 100 units and there is 360 days in a year. Compute: The economic order quantity The total cost of holding inventory. The reorder inventory level. The number of orders placed annually.

Amber Pvt Ltd sells 240,000 stools per year. Based on the company's policy, a safety stock of 4 percent from yearly sales is to be maintained. The carrying cost is $0.50 per unit annually and the ordering costs are $180. The delivery time is 10 days. Order should be placed in 100 units and there is 360 days in a year. Compute: The economic order quantity The total cost of holding inventory. The reorder inventory level. The number of orders placed annually.

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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