Q.2 (a) Given the following information, formulate an inventory management
system. The item is demanded 50 weeks a year.
(07 marks)
Item Cost
$10
Standard deviation of
Weekly demand
Order Cost
$250
25 per week
Annual holding cost (%)
33% of item cost Lead time
1 week
Annual demand
25,750
Service probability
95% 21.65)
Average demand
515
per
week
a. State the order quantity and reorder point.
b. Determine the total inventory costs.
c. If a price break of $50 per order was offered for purchase quantities of over 2.000.
would you take advantage of it? How much would you save annually?
Answers
Answered by
1
Answer:
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Answered by
3
Answer:2000 unit
Step-by-step explanation:
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