Davies store purchases electronic components from a los, Operation Management

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Davies store purchases electronic components from a los

Davie’s store purchases electronic components from a Los Angeles supplier for $150 per unit. He expects to use about 20 units per day; carrying cost is considered to be approximately 20% of the unit price. Davie estimates the cost of $50 to place an order and the lead time averages 7 days. (Assume 250 working days during year).

(a) What is the reorder point?

(b) What is the economic order quantity?

(d) What is the total inventory cost (=Ordering + Carrying)?

(e) What is the days per each cycle?

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Operation Management: Davies store purchases electronic components from a los

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