Aberwald Corporation expects to order 126,000 memory chips for inventory during the coming year, and...
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Aberwald Corporation expects to order 126,000 memory chips for inventory during the coming year, and it will use this inventory at a constant rate. Fixed ordering costs are $200 per order; the purchase price per chip is $25; and the firms inventory carrying costs is equal to 20 percent of the purchase price. (Assume a 360-day year.) - What is the economic ordering quantity for chips?
- How many orders should Aberwald place during the year? *
- If Aberwald holds a safety stock equal to a 30-day supply of chips, what is its average inventory level?
- If the lead time for placing an order is 5 days, and Aberwald holds a safety stock equal to a 30-day supply of chips, then at what inventory level should an order be placed?
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