For a manufacturing company that you are consulting formanagers are unsure about

For a manufacturing company that you are consulting formanagers are unsure about

admin / July 3, 2018

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For a manufacturing company that you are consulting formanagers are unsure about making inventory decisions associatedwith a key engine component. The annual demand is estimated to be15000 units and is assumed to be constant throughout the year.Each unit costs $80. The companys accounting department estimatesthat its opportunity cost for holding this item in stock for oneyear is 18% of the unit value. Each order placed with the suppliercosts $220. The companys policy is to place a fixed order for Qunits whenever the inventory reaches a predetermined reorder pointthat provides sufficient stock to meet demand until the suppliersorder can be shipped and received. As consultant your task is todevelop and implement a decision model to help them arrive at thebest decision. As a guide consider the following:

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