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An automobile manufacturer plans to produce 21,000 cars in the
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Question : An automobile manufacturer plans to produce 21,000 cars in the : 1887

An automobile manufacturer plans to produce 21,000 cars in the next year. All cars planned for production use the same wheels (4 units per car); therefore, demand for the wheels for the next year is known to be 84,000 units. The purchasing agent wants to know how many units to buy at one time. Historically, wheels have been received two days (lead time) after they were ordered. It costs pound 25 to order wheels, and the carrying-cost fraction used by the auto company is 15 % per year. The wheels cost is pound 50 each. What is the Economic Order Quantity? What is the number of orders per year? What is the frequency of orders? Assume the company works 365 days a year. What is the reorder point? The company works with a Safety Stock of 1.5 days. What is this stock? What is the Average Stock? What is the total Holding Cost? What is the total Ordering Cost? What is the total Stock Management Cost? Draw the evolution of stock in time.

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