SY Manufacturers (SYM) is producing T-shirts in three colors: red, blue, and white. The monthly demand for each color is 1,875 units. Each shirt requires 0.75 pound of raw cotton that is imported from the Luft-Geshfet-Textile (LGT) Company in Brazil. The purchasing price per pound is $1.85 (paid only when the cotton arrives at SYM's facilities) and transportation cost by sea is $0.40 per pound. The traveling time from LGT’s facility in Brazil to the SYM facility in the United States is two weeks. The cost of placing a cotton order, by SYM, is $75 and the annual interest rate that SYM is facing is 24 percent.
A. What is the optimal order quantity of cotton? (Round answer to nearest whole number) Optimal order quantity in pounds ___________
B. How frequently should the company order cotton?
Company orders ______ months
C. How frequently should the company order cotton? (Round answer to 2 decimal places)
Company orders _______months
D. How many orders will SYM place during the next year? (Round 2 decimal places)
Number of orders _______times
E. What is the resulting annual holding cost? (Round to nearest whole number)
Annual holding cost $______ per year
F. What is the resulting annual ordering cost? Annual ordering cost $______