One particular model is highly popular with annual sales of 2000 units per year. The cost of one such bicycle is 800 Br. Annual holding costs are 25% of the item’s cost and the ordering cost is 40 Br. The store is open 250 days a year.
a. What is the economic order quantity?
b. What is the optimal number of orders?
c. What is the optimal number of days between orders?
d. What are the annual total costs?
e. What are total annual ordering costs and annual total holding costs? Verify your results.