Ross White's machine shop uses 2500 brackets during the course of a year, and this usage is relativelyconstant throughout the year. These brackets are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost perbracket per year is $1.50 (or 10% of the unit cost) and the ordering cost is $18.75. There are 250 working days per year. a) i) What is Ross White's optimal order quantity? ii) What is the company's total annual cost of inventory?
Ross White's machine shop uses 2500 brackets during the course of a year, and this usage is relativelyconstant throughout the year. These brackets are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost perbracket per year is $1.50 (or 10% of the unit cost) and the ordering cost is $18.75. There are 250 working days per year. a) i) What is Ross White's optimal order quantity? ii) What is the company's total annual cost of inventory?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Ross White’s Machine Shop is located in Central Trinidad and specializes in designing components for the energy industry in Trinidad and Tobago.
Ross White's machine shop uses 2500 brackets during the course of a year, and this usage is relativelyconstant throughout the year. These brackets are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost perbracket per year is $1.50 (or 10% of the unit cost) and the ordering cost is $18.75. There are 250 working days per year.
a) i) What is Ross White's optimal order quantity?
ii) What is the company's total annual cost of inventory?
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