ValuRite sells commercial appliances to the hospitality industry. It sells an average of 90 VXT20
Commercial toasters per month. The cost of each unit is $78. The ordering process takes about 20
minutes. Carrying cost is 6% per unit cost.
The ordering process is handled by a supervisor whose hourly wage is $19. Lead time is 5 days. ValuRite
is open 345 days per year.
A. Model construction is worth 25 points.
B. What is the best order quantity for this product? (20 points)
C. When should an order be placed? (15 points)
D. What is the total cost? (10 points)