What is the reorder point in terms of on-hand inventory

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1. A particular type and color of the ubiquitous universal widget is purchased in lots of 3,000. The annual demand is continuous and constant at 24,000. The replenishment lead-time is 3 months. What is the reorder point in terms of on-hand inventory? What is the reorder point in terms of inventory position?

2. Dipswitch Electronics, Inc. produces a special purpose computer chip in lots. The chip can be produced at a rate of 1600 per day. Demand for the chip is constant at 400 per day. The cost of setting up the facility for a production run is $800.00. The annual inventory carrying charge rate is 0.25, and the unit cost for the chip is $1.00. What is the optimal lot size? How long will a production run last? If the setup takes one day (24 hours), what percent of the time is the facility free to produce other chips? Assume the facility works 240 days/year.

Reference no: EM132244522

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