How much will decision cost the co-op per year


The Harvard Co-op orders sweatshirts with theHarvard University emblem on them and sellsthem for $50 each. During a typical month, 900 sweatshirts are sold (this includes all styles and sizes ordered from a particular supplier). It costs $25 to place an order (for multiple sizes and styles) and 25 percent to carry sweatshirts in in- ventory for a year. a. How many sweatshirts should the Co-op order at one time? b. The supplier would like to deliver sweatshirts once a week. How much will this cost the Co- op per year? Under what conditions would you agree to the supplier's proposal? c. Suppose that sales increase to 1500 sweatshirts per month but you decide to keep the lot size the same as in part a. How much will this deci- sion cost the Co-op per year?

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Operation Management: How much will decision cost the co-op per year
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