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Quick cheif cookers sell at an average [ace of 12500 per month. Each cooker costs the company $100. The annual carrying cost for each cooker is 10%. Each Each order that is placed by company costs 300, covering clerical and delivery cost. The order lead time is 6 days and the company is open for business 365 days per year.
1. What is the economic order quality?
2. What is the annual order cost?
3. What is te annual carrying cost?
4. At what inventory level should company place an order?
5. Company has the option of buying in quantities of 4000 at a price of 95 per unit. should they buy? Why or why not?
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