Exercise 11-4: Target
Input
Annual demand, D 2,400,000
Cost per unit, C 10.00$
Holding cost, h 20%
Fixed transportation cost per order 5,000.00$
Fixed clerical cost per order 500.00$
Variable shipping cost per unit 0.10$
Intermediate Calculation
Fixed cost incurred per order, S 5,500.00$
Optimal Order Policy
Optimal batch size, Q* 114,891
Annual holding cost 114,891.25$
Number of orders per year 20.89
Annual fixed transportation cost 104,446.59$
Annual variable transportation cost 240,000.00$
Annual clerical cost 10,444.66$