Question

2 marks) quarter-inch stainless steel bolts are consumed in a factory at a fairly steady rate of 75 per week. The bolts cost the plant 5 inr per piece. It costs the plant 800 inr to place an order, and holding costs are based on an annual interest rate of 20%.

a. Determine the optimal number of bolts for the plant for the plant to purchase, and the time between placement of orders.

b. What is the annual total cost incurred by the factory for this item?

Answer 1

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