Ray’s Satellite Emporium wishes to determine the best order size for its best-selling satellite dish (model TS111).Each unit costs $160. Ray has estimated the annual demand for this model at 1000 units. His cost to carry one unit is 5% of the product cost per month per unit. He has estimated that each order costs $500 to place. Answer the following questions. (Keep 2 decimal places for non-integer results)
1. What is the holding cost (in dollars) per unit per year?
2. If the company orders 200 units each time, what is the cycle time (in months)? What is the order frequency (how many cycles per year)? What is the annual inventory holding cost? What is the annual inventory ordering cost?
3. If the company orders every other month, what is the cycle time and what is the order quantity?
4. What is the optimal order quantity? What is the corresponding annual ordering cost and annual holding cost? What is the corresponding cycle inventory and average flow time (in months)?
5. If the lead time is 0.5 month, what is the re-order point?
6. If the order size can only be between 200 and 500, what is the optimal order quantity? Please justify your answer by graph. What is the corresponding annual ordering cost?