Question: XYC Co. purchases an item. The annual demand for this item is 30000 units. The ordering cost is $80 per order. The holding cost is $15 per unit per year. The lead time for this item is 3 days. Assume 250 working days per year. Find:
a) Economic order quantity, EOQ.
b) Average inventory if EOQ is used.
c) What is the optimal number of orders per year.
d) What is the annual cost of ordering and holding inventory.
e) What is the re-order point.