What would be the average inventory in your warehouse

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1. A firm’s annual demand for a product is 100,000 units. It has a holding cost of $20 per unit per year and an ordering cost of $10 per order. Since the supplier boxes its products into 150 units per box, the firm is required to order an integer multiple of 150 units. What order quantity should it use to minimize ordering and holding costs?

2. You operate a paper ream selling business. Each month, you sell 400 units. You buy the paper for $2.50 each, and sell it for $3.25. You estimate the annual holding cost to be 20%. The per order cost is $25.

Let us suppose you operate optimally, what would be the average inventory in your warehouse?

3. You operate a paper ream selling business. Each month, you sell 400 units. You buy the paper for $2.50 each, and sell it for $3.25. You estimate the annual holding cost to be 20%. The per order cost is $25. What is the optimal order quantity?

Reference no: EM132231935

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