Manfred Manufacturing is involved in the production of machine parts.The company uses 600,000 pounds of steel annually.The current purchasing cost for steel is $3.20 per pound.The carrying cost for inventory is 10 percent of the purchase price.The cost of ordering steel is $800 per order.The company has decided to maintain a safety stock of 15,000 pounds.The delivery time per order is 6 days.The company works 365 days a year.
a.Determine the optimal EOQ.
b.How many orders will be placed annually?
c.What is the average inventory?
d.What is the inventory order point? (That is,at what level of inventory should a new order be placed?)
e.What is the company's total inventory cost for the year?

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The Answer of Manfred Manufacturing is involved in the production of machine parts.The company uses 600,000 pounds of steel annually.The current purchasing cost for steel is $3.20 per pound.The carrying cost for inventory is 10 percent of the purchase price.The cost of ordering steel is $800 per order.The company has decided to maintain a safety stock of 15,000 pounds.The delivery time per order is 6 days.The company works 365 days a year.
a.Determine the optimal EOQ.
b.How many orders will be placed annually?
c.What is the average inventory?
d.What is the inventory order point? (That is,at what level of inventory should a new order be placed?)
e.What is the company's total inventory cost for the year?

Manfred Manufacturing Is Involved in the Production of Machine Parts