Office Supreme, Inc., local retailer of office supplies faces demand for one of its inventory items at the stable rate of 240,000 units for each year. It costs Office Supreme $38 to procedure an order to replenish stock and $2.5 for each unit per year to take the item in stock. Stock is received five working days after the order is placed. Suppose 250 working days a year.
a. What is the Office Supreme’s optimal ordering quantity?
b. What is reorder point?
c. What is annual number of orders?
d. What is optimal interval (in working days) between orders?
e. What are yearly carrying cost, total cost and ordering cost?