Question

In: Operations Management

A supply chain manager is trying to reduce her inventory costs by coming up with better...

  1. A supply chain manager is trying to reduce her inventory costs by coming up with better ordering policies. The retail shop sells gaming consoles. One of the consoles has a steady demand and it is fairly steady.

The data is: Demand = 1400 per year; Cost per unit = $400; holding cost = 10% of the unit cost/per year; Ordering cost = $600 per order

  1. Find the EOQ.
  2. Compute the optimal number of orders per year
  3. Compute the total joint costs of holding and ordering costs per year

Solutions

Expert Solution

The answers to all the three asked questions with full explanations have been given in the above images.

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P.S. - if you liked the answer please give an Up-vote, this will be quite encouraging for me, thank you! :)

keosha answered 2 months ago
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