3 Per Norstrom supplies computer systems to a warehouse in Rotterdam.He sells 16 systems a week. The cost of an average system is €5,000, whileorder administration costs and delivery from Malaysia cost €1,000. Thelead time is around 4 weeks and holding costs are around 16 per cent ayear. What policy would you recommend for Per?5.4 Demand for an item is constant at 40 units a week, and the economic orderquantity is calculated to be 100 units. What is the reorder level if lead timeis constant at 4 weeks? What is the effect of adding some margin of safetyand raising the reorder level by ten units? What happens if the lead time(a) falls to 2 weeks or (b) rises to 6 weeks?

Hi student Since there are multiple questions,we will answer only first question.

Per Norstrom supplies computer systems to a He sells 16 systems a week. The cost of an avera order administration costs and delivery from lead time is around 4 weeks and holding costs year. What policy would you recommend for P

Per Norstrom supplies computer systems to a He sells 16 systems a week. The cost of an avera order administration costs and delivery from lead time is around 4 weeks and holding costs year. What policy would you recommend for P

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Please solve and explain how you got the answer.
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