Assembly of a product requires that a component part be ordered and stocked. Demand for the\nproduct is constant throughout the year at 7800 units annu
Assembly of a product requires that a component part be ordered and stocked. Demand for the
\r\nproduct is constant throughout the year at 7800 units annually. The cost to place an order is $95.
\r\nThe cost of the part is $56 and the holding cost rate is 22%. When units are ordered, they take two
\r\nweeks to arrive. Determine (a) the economic order quantity and (b) the reorder point. (c) The parts
\r\nare prepackaged in multiples of 100. It saves the supplier unpacking and repackaging time if they
\r\ncan ship in multiples of 100. The supplier has offered to reduce the price by $1 per unit if even
\r\nmultiples of 100 are purchased. How much would be saved (if anything) by taking this offer?
\r\n