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ACME estimates that the demand for one of their old products is declining. The current annual demand is estimated to be 200 units but is declining...
ACME estimates that the demand for one of their old products is declining. The current annual demand is estimated to be 200 units but is declining about 20 units every year. ACME's inventory managers are trying to decide to replenish the product or not. Their supplier ships the product only in multiples of 100 units. Ordering cost A = $50, unit cost v = $0.50 and carrying cost r = 0.48 $/$/year. For how many more years do you expect demand for this product? What is the total remaining demand? What should be ACME's next order quantity? (Remember: it needs to be a multiple of 100) How many years will pass until ACME depletes the order quantity calculated in part b?
