Inventory Ony company has an annual demand for units of inventory of 1,000 per year. The cost of placing an order each time is $90 and each item of inventory costs $2 to store. In this case, what would be the optimal amount of stock that should be ordered?

Suppose that your company sells a product for which the annual demand is 10,000 units. Holding costs are $1.00 per unit per year, and setup costs are $200 per order. What is the minimum total stock administration cost for the product?

Arcadia Windings is concerned about its stocks of copper cable. The demand for this is 8,000 meters a week, with a cost of £ 4 a meter. Each order costs £ 350 for administration and £ 550 for delivery, and has a lead time of 8 weeks. Holding costs are about 25 per cent of value held a year, and any shortages would disrupt production and give very high costs. What is the best inventory policy for the cable? How does this compare with the current policy of placing a regular order every week?

Assume Palmer Corp. markers uses 1,440,000 gallons of ink each year. Assume Palmer will order the ink at a rate of P2 per gallon plus a fixed cost of P100 per order. At cost, the firm's carrying cost is 20% of the inventory value. What is Palmer's minimum costs of ordering and holding inventory?