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​The H.A.L. Computer Store sells a printer for $200.


The H.A.L. Computer Store sells a printer for $200. Demand for this is constant during the year, and annual demand is forecasted to be 600 units. The holding cost is $20 per unit per year, while the cost of ordering is $60 per order. Currently, the company is ordering 12 times per year (50 units each time). There are 250 working days per year and the lead-time is 10 days. 


(a) Given the current policy of ordering 50 units at a time, what is the total of the annual ordering cost and the annual holding cost? 

(b) If the company used the absolute best inventory policy, what would the total of the ordering and holding cost be?

(c)  What is the reorder point? 


Solutions

Expert Solution

Economic Order Quantity

Amanda K answered 2 years ago
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