How many units should be ordered each time

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Reference no: EM13250760

Your company makes all the bobble head dolls for Major League Baseball. The doll making procedure is the same for all bobble heads, they are then sent to the painter to make each bubble head match the look of a specific player. The annual demand from MLB is 100,000 bobble heads. it costs you $60 to setup for a production run of the bobble heads, and the annual holding cost per unit is $15. The company that paints the bobble heads is willing to wait if you run out of inventory, but instead of paying $9 per unit, they require the price to be reduced to $5 per unit.

a) How many units should be ordered each time that an order is placed?
b) An order should be placed whenever total back-ordered demands sum to what?

Reference no: EM13250760

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