ABC Company supplies ink cartridges for printers on the aftermarket (i. E. They sell replacement cartridges). The demand for the cartridge is 400 units per week, with a standard deviation of demand of 30 units per day. The holding cost of the cartridge is $3/unit/year while the ordering cost is $190/order. The company works for 50 weeks per year at 5 days per week. The desired service level for this part is 99%, it takes 5 days to get it from the supplier. The company is investigating the possibility of implementing a continuous review (EOQ) inventory system. Assume that you found the economic order quantity is 1400 units. How many times on average would you need to place an order for ink cartridges next year (rounded up to nearest whole number)

Respuesta :

By implementing a continuous review (EOQ) inventory system with an EOQ of 1,400 units, ABC Company should place 15 orders for ink cartridges next year.

What is an EOQ inventory system?

An EOQ (Economic Ordering Quantity) inventory system is an inventory management technique that ensures:

  • Efficient inventory management decisions.
  • The optimal amount of inventory is ordered.
  • Annual demands are met.
  • Holding and ordering costs are minimized.

Thus, by implementing a continuous review (EOQ) inventory system with an EOQ of 1,400 units, ABC Company should place 15 orders for ink cartridges next year.

Learn more about the EOQ model at https://brainly.com/question/16024963

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