Problem
Rock Business maintenance facility uses 9,600 tires during the course of a year. The tires are purchased from a supplier 80 miles away. Their operation makes tires 288 days out of a year. The following information is known about the tires:
Annual demand: 9.600
Holding cost per bracket per year: $16
Order cost per order: $75
Lead time: 2 days
Working days per year 288
A. Given the above information, what would be the economic order quantity (EOQ)?
B. What is the number of orders per year?
C. What is the average inventory?
D. What are the annual holding costs?
E. What are the annual ordering costs?
F. Given the EOQ, what is the total annual cost of managing the inventory?
G. What is the time between orders?
H. What is the reorder point (ROP)?