week4 hmw_gba334 - Week 4 Chapter 6 PP 244245 618 Lila...

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May 26, 2010 Week 4 Chapter 6 PP. 244-245 6-18 Lila Battle has determined that the annual demand for number 6 screws is 100,000 screws. Lila,  who works in her brother’s hardware store, is in charge of purchasing. She estimates that it  costs $10 every time an order is placed. This cost includes her wages, the cost of the forms  used in placing the order, and so on. Furthermore, she estimates that the cost of carrying one  screw in inventory for a year is one-half of 1 cent. Assume that the demand is constant  throughout the year.  A. How many number 6 screws should Lila order at a time is she wishes to minimize total  inventory cost? 20,000 B. How many orders per year would be placed? What would the annual ordering cost be?  50 C. What would the average inventory be? What would the annual holding cost be?
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