1.) Demand for an item is constant at 1,000

units a year. Unit cost is $50, reorder cost is $100, holding cost is 22 per

cent of value a year and no shortages are allowed. Describe an Optimal

inventory policy for the item. What order size will give a variable cost within

10 per cent of optimal? What is the cost if suppliers only make deliveries of

200 units?

2.) A company is introducing a new item and

it has forecast likely demand next year as between 100 and 150 units. The costs

are uncertain, but the reorder cost is somewhere between $50 and $70, and the

holding cost is between 20 per cent and 25 per cent of unit cost a year. If the

unit cost is $200, what can you say about the order size?

Textbook: Inventory Control and Management by

Donald Waters

1.) Demand for an item is constant at 1,000

units a year. Unit cost is $50, reorder cost is $100, holding cost is 22 per

cent of value a year and no shortages are allowed. Describe an Optimal

inventory policy for the item. What order size will give a variable cost within

10 per cent of optimal? What is the cost if suppliers only make deliveries of

200 units?

2.) A company is introducing a new item and

it has forecast likely demand next year as between 100 and 150 units. The costs

are uncertain, but the reorder cost is somewhere between $50 and $70, and the

holding cost is between 20 per cent and 25 per cent of unit cost a year. If the

unit cost is $200, what can you say about the order size?

Textbook: Inventory Control and Management by

Donald Waters

1.) Demand for an item is constant at 1,000

units a year. Unit cost is $50, reorder cost is $100, holding cost is 22 per

cent of value a year and no shortages are allowed. Describe an Optimal

inventory policy for the item. What order size will give a variable cost within

10 per cent of optimal? What is the cost if suppliers only make deliveries of

200 units?

2.) A company is introducing a new item and

it has forecast likely demand next year as between 100 and 150 units. The costs

are uncertain, but the reorder cost is somewhere between $50 and $70, and the

holding cost is between 20 per cent and 25 per cent of unit cost a year. If the

unit cost is $200, what can you say about the order size?

Textbook: Inventory Control and Management by

Donald Waters

units a year. Unit cost is $50, reorder cost is $100, holding cost is 22 per

cent of value a year and no shortages are allowed. Describe an Optimal

inventory policy for the item. What order size will give a variable cost within

10 per cent of optimal? What is the cost if suppliers only make deliveries of

200 units?

2.) A company is introducing a new item and

it has forecast likely demand next year as between 100 and 150 units. The costs

are uncertain, but the reorder cost is somewhere between $50 and $70, and the

holding cost is between 20 per cent and 25 per cent of unit cost a year. If the

unit cost is $200, what can you say about the order size?

Textbook: Inventory Control and Management by

Donald Waters