A certain type of computer costs $1,000, and the annual holding cost is 25% of the...

A certain type of computer costs $1,000, and the annual holding cost is 25% of the value of the item. Annual demand is 10,000 units, and the order cost is $150 per order. (Assume 250 working days per year)

◦D = _______________

◦S = _______________

◦H = _______________

◦Q* = ______________

◦Total cost = ____________

◦Expected number of orders per year =_______________

Expected time between orders =

Expert Solution

D = 10000
S = 150
H = 25%*1000 = 250
Q*= sqrt((2DS)/H) = sqrt((2*10000*150)/250) = 109.5445115

Total cost = (10000/109.5445115)*150+(109.5445115/2)*250 = 27386.12788

Expected number of orders per year = (10000/109.5445115) = 91.28709292

Expected time between orders = number of working days in year/no of orders in a year=250/91.28709292 = 2.738612787 days

keosha answered 2 years ago

A certain type of computer costs $1,000, and the annual holding cost is 25% of the value of the item.

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