Cardinal Computers sells products online and through retailers. One of their most popular computers is the CC401 laptop computer. You have the following information for the​ computer:
Average weekly demand​ (48 weeks per​ year): 306 printers
Standard deviation of weekly​ demand: 20 printers
Order lead​ time: 1 week
Standard deviation of order lead​ time: 0.2 weeks
Item​ cost: ​$640 per printer
Cost to place an​ order: ​$25
Yearly holding cost per​ printer: ​40% of item cost
Desired service level during reordering​ period: 96​%
a) What are the total annual ordering and holding costs? Use rounded values (to nearest whole number) for any quantities used in the cost calculations. Round to nearest dollar ($xxx).
b) Suppose Cardinal Computers is currently created manufacturing orders with a quantity of 30 computers at a time. How much could they save annually in total ordering and holding costs by switching to building based on the EOQ? Use rounded values (to nearest whole number) for any quantities used in the cost calculations. Round to nearest dollar ($xxx).