The HA H.A.L.Computer

question 30

Essay

The H.A.L.Computer Store sells a printer for $200.Demand for this is constant during the year, and annual demand is forecasted to be 600 units.The holding cost is $20 per unit per year, while the cost of ordering is $60 per order.Currently, the company is ordering 12 times per year (50 units each time).There are 250 working days per year and the lead-time is 10 days.
(a)Given the current policy of ordering 50 units at a time, what is the total of the annual ordering cost and the annual holding cost?
(b)If the company used the absolute best inventory policy, what would the total of the ordering and holding cost be?
(c)What is the reorder point?

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Definitions:

MicroFridge

A compact combination of a refrigerator and microwave oven, typically used in small living spaces such as dormitory rooms.

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A small portion of food typically consumed after the usual dinner time, often late in the evening or at night.

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Frequency marketing is a strategy that rewards customers based on the frequency of their purchases, aiming to increase customer loyalty by offering incentives for repeated business.

Usage Rate

The frequency with which a consumer uses a product or service over a specified period.