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The retail outlet has its own production facility for manufacturing denim cloth. The ordering cost ($150) is cost of setting up the production procedure to make the denim cloth. The carrying cost is $0.75 per yard and demand is 10,000 yards for each year. The production facility operates same days as the retail store is open (i.e. 311 days) and manufactures 150 yards of denim cloth for each day. Find out:

a) The optimal order size
b) The total inventory cost
c) The length of time to receive an order
d) The number of orders per year
e) The maximum inventory level.

Operation Management, Management Studies

  • Category:- Operation Management
  • Reference No.:- M915139

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