Custom Computers, Inc. assembles custom home computer systems. The heat sinks needed are bought for $12 each and are ordered in quantities of 650 units. Annual demand is 5200 heat sinks, the annual inventory holding cost rate is $3 per unit, and the cost to place an order is estimated to be $50. Calculate the following:
Calculate the following:
(a) Average inventory level
units
(b) The number of orders placed per year
orders
(c) The total annual inventory holding cost $
(d) The total annual ordering cost $
(e) The total annual cost $
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The new order quantity would be 1300 heat sinks. Recalculate Problem, parts (a) through (e), and compare results:
An order quantity of 650 units yields
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