Franz Beckenbauer and Johan Cruyff are purchasing managers for the headquarters of a large sports marketing company chain with a central inventory operation. Their fastest-moving inventory item has a daily demand of 35 units. The cost of each unit is £200, and the inventory carrying cost is £25 per unit per year. The average ordering cost is £60 per order. It takes about 5 days for an order to arrive, and there are 252 working days per year. 3A. To minimize the cost, how many units should be ordered each time an order is placed? What is the total annual inventory cost, including the cost of the units? 3B. How can they manage the days it takes for an order to arrive?

Franz Beckenbauer and Johan Cruyff are purchasing managers for the headquarters of a large sports marketing company chain with a central inventory operation. Their fastest-moving inventory item has a daily demand of 35 units. The cost of each unit is £200, and the inventory carrying cost is £25 per unit per year. The average ordering cost is £60 per order. It takes about 5 days for an order to arrive, and there are 252 working days per year. 3A. To minimize the cost, how many units should be ordered each time an order is placed? What is the total annual inventory cost, including the cost of the units? 3B. How can they manage the days it takes for an order to arrive?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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