Suppose annual demand is 2000 the carrying cost is 20 the, Operation Management

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Suppose annual demand is 2000 the carrying cost is 20 the

Question: Suppose annual demand is 2000, the carrying cost is 20%, the cost per item is $50, and the cost per order is $5.

a) find the optimal order quantity and the total minimum cost

b) if backorders are permitted and the backorder cost is $30, find out the total minimum cost and how much savings there are relative to a policy without backorders.

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Operation Management: Suppose annual demand is 2000 the carrying cost is 20 the

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