An aircraft company uses a specialized titanium alloy compon…
An aircraft company uses a specialized titanium alloy component at a constant rate of 50 pounds per year (50 weeks). Bolts cost $20 per pound, and it costs $2 to place an order for any order size from the supplier. The cost of capital is 25% per year. (a) Calculate the optimal order quantity for the alloy component. (b) Approximately how many times a year should the aircraft company place a new order for this component? PLEASE SHOW YOUR WORK. STATE ANY EXCEL FORMULAS USED.
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