You have the following information:
- Ordering cost: $300/order
- Carrying cost (Carrying cost): $10/year
- Daily Demand rate: 20 units/day
- Production rate: 70 units/day
- Supply lead time: 10 weeks
- Safety stock: 120 units
- Initial Inventory (Stock on-hand): 1200 units
- 52 weeks per year, 365 days per year
Taking into account the above, answer the following :
1) Annual ordering cost.
2) Annual cost of holding inventory (annual carrying cost)
3) Total cost (total cost)
4) Should a new order be placed? YES, NO, and why?
5) If YES, in what quantity should the order be placed?
