What are the total annual holding and ordering costs

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Reference no: EM1382318

Westside Auto purchases a compant used in the manufacture of automobile generators directly from the supplier. Westside's generators production operation which is operated a constant rate will require 1000 components per month throughout the year ( 12,000 units annually) Assume that the ordering costs are $25 per order the unit cost is $2.50 per compont and annual holding costs are 20% of the value of the inventory. Westsides has 260 working days per year and a lead time of 5 days.
A. what is the EOQ for this component?
B. What is the reorder point?
C. What is the cycle time?
D. What are the total annual holding and ordering costs associated with your recommended EOQ?

Reference no: EM1382318

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