Business, 13.08.2021 02:40 imamador6396

Morty's Raincoats sells the Executive, a raincoat so popular that the demand is fairly steady throughout the year (during summer months, Morty exports them to the southern hemisphere). The demand is 4000 raincoats per year. Morty buys these raincoats for $50 per unit and stores them in his basement. Morty's calculations show him that he generally incurs an opportunity cost (or cost of capital) of 20% per year on the value invested in inventory. Cost of transportation is $100/order; in addition, Morty tips the truck driver $25 for every delivered order. Assume 50weeks in a year 1. How many Executives should Morty order every time he places an order?
2. It is also known that the coats are actually made in Guadalajar, Mexico and it takes a full week for a batch to be delivered after an order is placed. Given this information, what is the optimal re-order point?

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