University of WisconsinI SY E 645 Hawkeye Electronics stocks a popular brand of two?way radios

Marketing Oct 07, 2021

University of Wisconsin I SY E 645

Hawkeye Electronics stocks a popular brand of two?way radios. The cost of placing an order with the manufacturer is $100 per order. Each radio costs $300 to purchase from the manufacturer. The manufacturer has a one?week lead time and demand is estimated to be 100 per week. Holding costs are assessed at the annual interest rate of 20%.

a) Compute the economic order quantity, reorder point, reorder interval and total annual costs. What is the inventory position at the time an order is received by the manufacturer?

b) How would your responses to part a) change if the manufacturer had a three?week lead time?

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