Question: The air filter manufacturer in problem (2) informs you that due to limited production capacity and high demand, he cannot ship your order at once, but instead will ship you 300 filters per day until the order is filled. Again, the company is open for business 20 days per month, 12 months per year and it takes 2 days for an order to arrive once it has been placed.

(a) What quantity do you order now?

(b) What is the maximum inventory level?

(c) Compute the total annual inventory costs.

(d) What is the reorder point?

Question: Gentle Electric, which we discussed in class, has learned about a new company on the West Coast that has the following prices (I've included the 50-cent unloading fee with the price.)

first 100 $485.50

next 100 $470.50

next 100 $450.50

Holding costs remain at 20% of the value of the inventory, maximum warehouse space is still 200 units, and each time you place an order it costs $25.

(a) Compute the average cost for if the order quantity is 285 units.

(b) Compute the annual ordering costs if the order quantity is 285 units.

(c) Compute the annual holding costs if the order quantity is 285 units.

Price: $16.95

Solution: The downloadable solution consists of 4 pages, and 382 words
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