Problem:
Joe Henry's machine shop uses 2500 brackets per year. Brackets are purchased from a supplier 90 miles away.
Annual demand = 2500
Holding cost per bracket per year = $1.50
Order cost per order = $ 18.75
Lead time = 2 days
Working days per year = 250
1. What is economic order quanity
2. Given EOQ, what is average inventory. What is average inventory holding cost?
3. Given EOQ, how many orders would be made each year? What would be the annual costs
4. What is total annual cost of managing the inventory?
5. What is the time between order.
6. What is the reorder point.