Continuous review inventory process adopted by retailer

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Consider a continuous review inventory process adopted by a retailer. orders are placed by a manager is paid @ $42 hour. The order placement takes on average half an hour of the managers time. the material preparation amounts to $2.5 per order. The per unit price of the product being ordered is $24 unit. The holding cost h is assessed to be 24% of the per unit cost of acquisition of the product. The shipment cost is based on the formula $114+$4.2Q where Q is the order amount. Daily demand is normally distributed with mean 32 and standard deviation 18. The store operates 355 days per year.

For the calculation of optimal order quantity, the ordering cost per order, S=

For the calculation of optimal order quantity, the holding cost per unit, h=

For the calculation of optimal order quantity, the annual demand is=

Reference no: EM132267251

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