You manage a process that orders important materials from a supplier. You have t

Question

You manage a process that orders important materials from a supplier. You have to decide how much to order from the supplier. You order the same amount every time when it comes time to order. Important data are below:
You use 296,688 units per year of this material.
Your supplier charges you 1,823 per order for shipping and handling, no matter how much you order.
Each unit you order costs 768
Your unit has no other projects you could invest in, so your only other option for using your budgeted money is to keep it in a bank account that earns 0.02 interest per year.
How much You manage a process that orders important materials from a supplier. You have to decide how much to order from the supplier. You order the same amount every time when it comes time to order. Important data are below:
You use 296,688 units per year of this material.
Your supplier charges you 1,823 per order for shipping and handling, no matter how much you order.
Each unit you order costs 768
Your unit has no other projects you could invest in, so your only other option for using your budgeted money is to keep it in a bank account that earns 0.02 interest per year.
How much You manage a process that orders important materials from a supplier. You have to decide how much to order from the supplier. You order the same amount every time when it comes time to order. Important data are below:
You use 296,688 units per year of this material.
Your supplier charges you 1,823 per order for shipping and handling, no matter how much you order.
Each unit you order costs 768
Your unit has no other projects you could invest in, so your only other option for using your budgeted money is to keep it in a bank account that earns 0.02 interest per year.
How much

Explanation / Answer

So order 8392

D Annual demand 296688 P Price 768 (0.02*P) h Holding cost 15.36 k ordering cost 1823 Q Optimal Q (sqrt(2*K*D/h) 8391.9 Rounded 8392

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