Capital Intensive parts have:
inventory cycle times
We stock Bulldozer belts for Caterpillar, Hitachi, Komatsu, etc.
purchase cost per belt is
We sell them at an average
sales price of
inventory cycle time per belt is approximately
1 year and our
cost of capital is
inventory cost incurred per item is
Each belt ties up on average $30,000 in capital and we incur an
inventory cost of
$3600. This is a Capital Intensive item.