Question - For supply item MT, Bluesky Company has been ordering 150 units based on the recommendation of the salesperson who calls on the company monthly. The company has hired a new purchasing agent, who wants to start using the economic-order-quantity method and its supporting decision elements. She has gathered the following information:
Annual demand in units300
Days used per year300
Lead time, in days20
Ordering costs$125
Annual unit carrying costs$25
Determine the EOQ, average inventory, orders per year, average daily demand, reorder point, annual ordering costs, and annual carrying costs.