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M. Cotteleer Electronics supplies microcomputer circuitry to a company that incorporates microprocessors into refrigerators and other home appliances. One of the components has an annual demand of 260 units, and this is constant throughout the year. Carrying cost is estimated to be $1.00 per unit per year, and the ordering (setup) cost is $21 per order. a) To minimize cost, how many units should be ordered each time an order is placed? 104.50 units (round your response to two decimal places). b) How many orders per year are needed with the optimal policy? 2.50 orders (round your response to two decimal places). c) What is the average inventory if costs are minimized? 52.25 units (round your response to two decimal places). d) Suppose that the ordering (setup) cost is not $21, and Cotteleer has been ordering 150 units each time an order is placed. For this order policy (of Q = 150) to be optimal, the ordering (setup) cost would have to be $ (round your response to two decimal places).

M. Cotteleer Electronics supplies microcomputer circuitry to a company that incorporates microprocessors into refrigerators and other home appliances. One of the components has an annual demand of 260 units, and this is constant throughout the year. Carrying cost is estimated to be $1.00 per unit per year, and the ordering (setup) cost is $21 per order. a) To minimize cost, how many units should be ordered each time an order is placed? 104.50 units (round your response to two decimal places). b) How many orders per year are needed with the optimal policy? 2.50 orders (round your response to two decimal places). c) What is the average inventory if costs are minimized? 52.25 units (round your response to two decimal places). d) Suppose that the ordering (setup) cost is not $21, and Cotteleer has been ordering 150 units each time an order is placed. For this order policy (of Q = 150) to be optimal, the ordering (setup) cost would have to be $ (round your response to two decimal places).

Practical Management Science
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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M. Cotteleer Electronics supplies microcomputer circuitry to a company that incorporates microprocessors into refrigerators and other home appliances. One of the components has an annual demand of 260 units, and this is constant throughout the year. Carrying cost is estimated to be $1.00 per unit per year, and the ordering (setup) cost is $21 per order. a) To minimize cost, how many units should be ordered each time an order is placed? 104.50 units (round your response to two decimal places). b) How many orders per year are needed with the optimal policy? 2.50 orders (round your response to two decimal places). c) What is the average inventory if costs are minimized? 52.25 units (round your response to two decimal places). d) Suppose that the ordering (setup) cost is not $21, and Cotteleer has been ordering 150 units each time an order is placed. For this order policy (of Q = 150) to be optimal, the ordering (setup) cost would have to be $ (round your response to two decimal places).
Transcribed Image Text:M. Cotteleer Electronics supplies microcomputer circuitry to a company that incorporates microprocessors into refrigerators and other home appliances. One of the components has an annual demand of 260 units, and this is constant throughout the year. Carrying cost is estimated to be $1.00 per unit per year, and the ordering (setup) cost is $21 per order. a) To minimize cost, how many units should be ordered each time an order is placed? 104.50 units (round your response to two decimal places). b) How many orders per year are needed with the optimal policy? 2.50 orders (round your response to two decimal places). c) What is the average inventory if costs are minimized? 52.25 units (round your response to two decimal places). d) Suppose that the ordering (setup) cost is not $21, and Cotteleer has been ordering 150 units each time an order is placed. For this order policy (of Q = 150) to be optimal, the ordering (setup) cost would have to be $ (round your response to two decimal places).
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