The annual demand for a product is 16,800 units. The weekly demand is 323 units, with a standard deviation of 95 units. The cost to place an order is $31.50, and the time from ordering to receipt is two weeks. The annual inventory carrying cost is $0.20 per unit. Find the optimal order quantity.

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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The annual demand for a product is 16,800 units. The weekly demand is 323 units, with a standard deviation of 95 units. The cost to place an order is $31.50, and the time from ordering to receipt is two weeks. The annual inventory carrying cost is $0.20 per unit.

Find the optimal order quantity.

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