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Supply Change Two Questions

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1 Supply Chain Inventory Management Student’s Name: Institutional Affiliation: Instructor: Course Title: Date: 2 Supply Chain Question 8, Pg. 357 The formula for calculating the total cost of each policy used for ordering is 2×𝐷×𝑆 Total cost =√ 𝐻 , Where D = annual inventory, S = price per unit, H = holding cost. H= 20% of order placed each time. 2×2000×2.5 Thus, for policy 1, Total cost = √ 20/100×1 = $223.61 For the second policy of placing a 200 quantity of order each time, 2×2000×2.40 Total cost = √ 20/100×200 = $15.49 For the third policy, that is, making a 300 unit order each time you place an order, 2×2000×2.25 Total cost= √ 20/100×300 = $12.25 And for the fourth policy, having 1000 units per order, 2×2000×2 The total cost of will be √20/100×1000= $20 From the calculations above, the third policy of ordering 300 units per order is the cheapest with a total cost of $12.25, followed by the second policy with a total cost of $15.49, then the fourth policy of ordering a 1000 units per order at a total cost of $20 and lastly the first option of placing one unit per order with a total cost of $223.61. The best policy that is econo ...
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