What is the demand during the lead time, Operation Management

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What is the demand during the lead time

At Amzon.ca the demand for popular books is constant at 32,000 books per year. The cost of placing an order to replenish stock is $10, and the annual cost of holding is $4 per book. Stock is received 5 working days after an order has been placed. No backorders are allowed. Assume 300 working days a year.

a. What is Amazon's optimal ordering quantity? What is the optimum number of orders per year?
b. What is the optimal interval (in working days) between orders?
c. What is demand during the lead time?
d. What is the inventory position immediately after an order has been placed?
e. If the average cost per book is $20 and the supplier offers a discount of 10% if Amazon orders a minimum of 500 books at a time, should Amazon accept the deal?

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Operation Management: What is the demand during the lead time

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Operation Management: What is the demand during the lead time

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Operation Management: What is the demand during the lead time

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