Total Points 3. Gerhard Manufacturing is involved in the production of automobile parts and has...
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Total Points 3. Gerhard Manufacturing is involved in the production of automobile parts and has the following inventory, carrying, and storage costs: i. Annual unit usage (Sales) is 700,000. Assume a 50 week year in your calculations. ii. The carrying cost is 15 percent of the purchase price. iii. The purchase price is $100 per unit. iv. The ordering cost is $150 per order. The delivery time is 1 week. V. Given the above information: a) Determine the optimal Economic Order Quantity (EOC) level. 13 points] b) How many orders will be placed annually? 12 points) c) What is the inventory order point? (That is at what level of inventory should a new order be placed?) 13 points] d) What is the Average Inventory level? 12 points]
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