90.2K

Verified Solution

Link Copied!

The Fabric Fair sells fabrics to a wide range of industrial and consumer users. One of the products it carries is denim cloth, used in the manufacture of jeans and carrying bags. The supplier for the denim cloth pays all incoming freight. No incoming inspection of the denim is necessary because the supplier has a track record of delivering high-quality merchandise. The purchasing officer of the Fabric Fair has collected the following information: E: (Click the icon to view the information.) Read the requirements Requirement 1. Calculate the EOQ for denim cloth Begin by selecting the formula used to calculate EOQ. (D = Demand in units for one year, P = Ordering cost per purchase order, C = Carrying cost of one unit in stock, Q = Any order quantity.) 2DP EOQ = .X -X Data Table Requirements (Round the denominator to the nearest cent.) The EOQ for denim cloth is yards 1. Calculate the EOQ for denim cloth. 2. Calculate the number of orders that will be placed each year. 3. Calculate the reorder point for denim cloth. Annual demand for denim cloth 26,100 yards Ordering cost per purchase order $145 Carrying cost per year 10% of purchase costs Safety-stock requirements None Cost of denim cloth $16 per yard The purchasing lead time is 2 weeks. The Fabric Fair is open 225 days a year (45 weeks for 5 days a week). Print Done Print Done

Answer & Explanation Solved by verified expert

See Answer