Question 5 O out of 1 points A small refrigeration shop stocks up on electric mo

Question

Question 5 O out of 1 points A small refrigeration shop stocks up on electric motors from a catalog supplier located in the Midwest. The price of the motors varies X depending on the quantity purchased; the price breaks are shown in the table. The refrigeration shop knows it will need around 600 motors for the coming season and that it will cost them about $40 to place an order. The company determined that its inventory carrying cost is 20%. Options Quantity 1–49 50-99 100 and above Price/unit $35.00 $34.00 $33.00 What is the total annual inventory cost for Option C? Selected Answer: $21,580 Answers: a. $20,971 $21,580 c. $21,661 d. Do not have enough information to compute e $20,370

Explanation / Answer

7. Number of lunch boxes to be ordered = Z (service Level at 98%) * Standard deviation of lead time * Average Demand

= 2.05 * 4 * 100

= 820

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