The ABC company, in Hayward, California, makes flashing lights for toys. The demand for flashing lights is 70 units per week. Ordering cost is $50 per order and holding cost is $1.00 per light per month. Find the: a) Optimal order quantity. b) The average inventory level. c) The Total Cost. d) If LT=3 days, find ROP. e) If SS=10, find TC.

The ABC company, in Hayward, California, makes flashing lights for toys. The demand for flashing lights is 70 units per week. Ordering cost is $50 per order and holding cost is $1.00 per light per month. Find the: a) Optimal order quantity. b) The average inventory level. c) The Total Cost. d) If LT=3 days, find ROP. e) If SS=10, find TC.

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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Question

The ABC company, in Hayward, California, makes flashing lights for toys. The demand for
flashing lights is 70 units per week. Ordering cost is $50 per order and holding cost is $1.00 per
light per month. Find the:
a) Optimal order quantity.
b) The average inventory level.
c) The Total Cost.
d) If LT=3 days, find ROP.
e) If SS-10, find TC.

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