1.Magnus technologies in New York buys 50,000 computers each year from its suppliers
in Texas. Each computer costs $1800, and carrying cost is 26% of the value of the
average inventory of computer per year. If the ordering cost is $270 per order, determine
the economic order quantity for computing device. Also, determine the number of orders
and the TICs.
2. Serta inc. manufactures high-quality spring-based cotton mattresses. A set of eight
identical stainless-steel springs are used to produce a mattress. The inventory holding
cost for springs is $2.15 per spring per year. Serta inc has estimated an annual demand
for 20,000 mattresses. Determine the quantity of springs Serta inc should procure to
minimize the TICs for springs if the ordering cost per order is $50? Also, compute the
average inventory level.
3. Compute the economic lot size for an item that has an annual demand of 5000 units.
Assume the inventory holding costs are based on an annual interest rate of 20%.
Further, the purchase cost of the item is $10 and the ordering cost is $25.20 per order.
Also, compute the cycle time if there are 250 workdays in a year.
4. Sun Corporation is a retailer of school notebooks. They buy notebooks from a
wholesaler at $0.50 and sell it to consumers at $0.85 per notebook. The demand for
notebooks is estimated at 9000 per quarter. If the ordering cost is $4 per order and
carrying cost is based on an annual interest rate of 15%, compute the economic order
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