question archive A car dealer pays $17,985 for each car purchased
A car dealer pays $17,985 for each car purchased
Subject:EconomicsPrice: Bought3
A car dealer pays $17,985 for each car purchased. The annual holding rate is estimated at 25%, and the ordering cost is $7,558. The dealer is selling an average of 516 cars a year.
2. The dealer turns to the EOQ policy. The dealership experiences lead time of 1.2 cycles. What is the lead-time in working days (360 working days a year)?
a. 0.0968
b. Can't answer, because the cycle is unknown
c. The lead-time is related to the reorder point, but the reorder point is unknown.
d. Between 34 and 35 working days.
e. None of the above
