The Western Jeans Company purchases denim from Cumberland Textile Mills. The Western Jeans Company uses 35,000 yards of denim per year to make jeans. The cost of ordering denim from the textile company is $500 per order. It costs Western $0.35 per yard annually to hold a yard of denim in inventory. Determine the optimal number of yards of denim the Western Jeans Company should order, the minimum total annual inventory cost, the optimal number of orders per year, and the optimal time between orders.

Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Chapter16: Lean Supply Chain Management
Section: Chapter Questions
Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...
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The Western Jeans Company purchases denim from Cumberland Textile Mills. The Western
Jeans Company uses 35,000 yards of denim per year to make jeans. The cost of ordering denim
from the textile company is $500 per order. It costs Western $0.35 per yard annually to hold a
yard of denim in inventory. Determine the optimal number of yards of denim the Western Jeans
Company should order, the minimum total annual inventory cost, the optimal number of orders
per year, and the optimal time between orders.

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