1. Electronic Village stocks and sells a particular brand of a personal computer. It costs the store $450 each time it orders with the manufacturer for the personal computers. The annual cost of carrying the PCs in inventory is $170. The store manager estimates the annual demand for the PCs will be 1,200 units.
1. Electronic Village stocks and sells a particular brand of a personal computer. It costs the store $450 each time it orders with the manufacturer for the personal computers. The annual cost of
carrying the PCs in inventory is $170. The store manager estimates the annual demand for the PCs will be 1,200 units.
a. Determine the optimal order quantity and the total minimum inventory cost.
B.Assume that shortages are allowed and that the shortage cost is $600 per unit per year. Compute the optimal order quantity and the total minimum inventory cost.
2. A computer products store stocks color graphics monitors, and the daily demand is
Determine the reorder point that will achieve
a 98% service level.
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