Dot Com

D= 32,000
H= 4
S= 10
Wd = 300
L= 5

a What is Dot Com’s optimal order quantity?

√(2𝐷𝑆/𝐻)

√((2 (32,000) 10)/4)

= 400

b What is the optimal number of orders per year?

𝐷/Q
=

=32,000/400

= 80

c What is the optimal interval (in working days) between orders?

( 𝑁𝑜. 𝑜𝑓 𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝐷𝑎𝑦𝑠 )/(𝑁𝑜. 𝑜𝑓 𝑂𝑟𝑑𝑒𝑟 𝑃𝑒𝑟 𝑌𝑒𝑎𝑟)
=

= 300/80

= 3.75 days per order

d What is demand during the lead time?

= dL
=32,000/300
5 𝑑𝑎𝑦𝑠
= 533.33

e What is the reorder point?

= dL + Safety Stock
32,000/300
= + 0

= 533.33

f What is the inventory position immediately after an order has been placed?
IP = OH + SR - BO
= IP = OH + SR - BO
= 533.33 + 400 + 0
= 933.33