****PLEASE SEE IMAGE, QUESTION 1 AND 2 ARE SOLVED ALREADY** QUESTION 1 Use the b

Question

****PLEASE SEE IMAGE, QUESTION 1 AND 2 ARE SOLVED ALREADY**

QUESTION 1

Use the below information for questions 1-5

A wholesale company is reviewing its inventory costs for a high volume item which has an annual demand of 72,000 units, with a per unit purchase price of $10. The ordering cost is estimated at $25, and the annual inventory carrying cost for the warehouse is computed at 30% of the price while the in-transit shipping factor is 13%. The in-transit shipping time is 14 days.

Forecasted average demand is 200 units per day with a standard deviation of the forecast error of 20 units per day. The average order lead time is 16 days with a standard deviation of order lead time of 3 days. A 98% service level is to be maintained. There are 360 days in a year.

What is the Annual Carrying Cost for this product (roughly)?

$1,642.50

$10,674.32

$8,552.33

$2,564.09

4 points   

QUESTION 2

What is the Annual Ordering Cost for this product (roughly)?

$1,643.83

$2,567.03

$$8,556.77

$10,677.54

4 points   

QUESTION 3

What is the cost of holding safety stock for this product (roughly)?

$1,643.70

$1,280

$780.42

$3,720

4 points   

QUESTION 4

How much is the Annual In-Transit Carrying Cost for this product (roughly)?

$101.68

$2,452.73

$3,640

$36,400

4 points   

QUESTION 5

What is the Total Annual Cost for this product (roughly)?

$3,286.33

$10,649.34

$9,332.45

$1,642.50

$10,674.32

$8,552.33

$2,564.09

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