Suppose that Westside Auto of Problem 4, with D = 12,000 units per year, C,, = (2

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Suppose that Westside Auto of Problem 4, with D = 12,000 units per year, C,, = (2.50)(0.20) = $0.50, and Co = $25, decided to operate with a backorder inventory policy. Backorder costs are estimated to be $5 per unit per year.

 

Identify the following:

 

a. Minimum cost order quantity

b. Maximum number of backorders

c. Maximum inventory

d. Cycle time

e. Total annual cost