2.6 The A&M Hobby Shop carries a line of radio-controlled model racing cars. De- mand for the cars is assumed to be cons

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2 6 The A M Hobby Shop Carries A Line Of Radio Controlled Model Racing Cars De Mand For The Cars Is Assumed To Be Cons 1 (380.22 KiB) Viewed 34 times

2.6 The A&M Hobby Shop carries a line of radio-controlled model racing cars. De- mand for the cars is assumed to be constant at a rate of 40 cars per month. The cars cost $60 each, and ordering costs are approximately $15 per order, regardless of the order size. The annual holding cost rate is 20%. a. Determine the economic order quantity and total annual cost under the assumption that no backorders are permitted. b. If the lead time is six days, what is the reorder point? Assume a year consists of 300 days.