A manufacturer has a production facility that requires 18,515 units of component JY21 per year. Following a long-term contract, the manufacturer purchases component JY21 from a supplier with a lead time of 13 days. The unit purchase cost is $22.4 per unit. The cost to place and process an order from the supplier is $137 per order. The unit inventory carrying cost per year is 12.1 percent of the unit purchase cost. The manufacturer operates 250 days a year. Assume EOQ model is appropriate. If the manufacturer uses a constant order quantity of 2,716 units per order, what is the annual inventory cost? Use at least 4 decimal places.
A manufacturer has a production facility that requires 18,515 units of component JY21 per year. Following a long-term contract, the manufacturer purchases component JY21 from a supplier with a lead time of 13 days. The unit purchase cost is $22.4 per unit. The cost to place and process an order from the supplier is $137 per order. The unit inventory carrying cost per year is 12.1 percent of the unit purchase cost. The manufacturer operates 250 days a year. Assume EOQ model is appropriate. If the manufacturer uses a constant order quantity of 2,716 units per order, what is the annual inventory cost? Use at least 4 decimal places.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Transcribed Image Text:A manufacturer has a production facility that
requires 18,515 units of component JY21 per year.
Following a long-term contract, the manufacturer
purchases component JY21 from a supplier with a
lead time of 13 days. The unit purchase cost is $22.4
per unit. The cost to place and process an order
from the supplier is $137 per order. The unit
inventory carrying cost per year is 12.1 percent of
the unit purchase cost. The manufacturer operates
250 days a year. Assume EOQ model is appropriate.
If the manufacturer uses a constant order quantity of
2,716 units per order, what is the annual inventory
cost?
Use at least 4 decimal places.
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