Purchase Cost per item: $5.00 Annual Demand: 36,500 units Number of operating days: 365 days...
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Purchase Cost per item: $5.00 Annual Demand: 36,500 units Number of operating days: 365 days Cost to place an order: $12.00 Carrying cost per unit per year: $0.40 Orders must be in lot sizes of (multiples of) 20 Lead Time: 2 days Safety Stock: 1 days worth (not 1 unit) 1) Compute EOQ 2) Calculate Re-order point 3) Calculate Total Relevant Cost (Ordering + Carrying + Cost of carrying safety stock)
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