GIVEN
Annual Unit Sales = 45,000
units Ordering Cost = $10
per order Carrying Cost/unit = $2.50
per unit Lead Time = 3 week (50 week year)
1. What is the ‘ideal’ amount of Inventory?
2. WHEN should an order be placed? (How much safety stock ?)
3. HOW MUCH is the order size?
4. What is the average inventory on hand?
5. What are annual ordering costs?
6. What are annual carrying costs?
7. Give an example of an ordering cost.
8. Give an example of a carrying cost.