Question

Overland Motors uses 25,000 gear assemblies each year (i.e. 52 weeks) and purchases them at $3.40 per unit. It costs $50 to process and receive each order, and it costs $1.10 to hold one unit in inventory for a whole year. Assume demand is constant. Vendor has been ordering 1,000 gear assemblies at a time, but can adjust his order quantity if it will lower costs. a. What is the annual cost of the current policy of using a 1,000-unit lot size? b. What is the order quantity that minimizes cost? c. What is the time between orders for the quantity in part b?​

Answer 1

Answer:

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