(Solved): 1. The Cowboy Saddle Company manufactures plastic saddles that are used in the assembly process of ...

1. The Cowboy Saddle Company manufactures plastic saddles that are used in the assembly process of their Mr. Ed doll. The firm desires to control inventory levels so as to minimize the sum of holding and order costs. Annual demand is 4000 units, and the item costs $25 per unit. It costs the firm $15 to place an order. The firm estimates its yearly inventory carrying costs at 10%. The lead-time for the product is 5 working weeks. Assume that there are 50 weeks in the work year and 5 working days per week. The EOQ is: If the Cowboy Saddle Company orders 200 each time, then what will be the total annual holding cost? If the Cowboy Saddle Company orders 200 each time, then how many orders will be placed in a year? What is the time between orders (in working days) if the Cowboy Saddle Company orders 400 units each time? What will be the total annual order cost if the Cowboy Saddle Company ordered 200 units each time? Assume no safety stock or service level requirement. In order not to run out of stock before the receipt of a new order, at what inventory level should the Cowboy Saddle Company place an order? That is, the reorder point is: