(Answered) Northwest calculators inc purchases plates used in the

Economics

Northwest Calculators, Inc. purchases plates used in the manufacture of calculators directly from the supplier. Northwest's calculator production operation, which is operated at a constant rate, will require 10,000 plates per month throughout the year (120,000 units annually). Assume that the ordering costs are $30 per order, the unit cost is $1.50 per component, and annual holding costs are 15% of the value of the inventory. Northwest has 250 working days per year and a lead time of 7 days. Answer the following inventory policy questions:

a. What is the EOQ for this component?

b. What is the reorder point?

c. What is the cycle time?

d. What are the total annual holding and ordering costs associated with your recommended EOQ?

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Business Economics, Economics

Category:- Business Economics
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