Andrew and Fulton, Inc , uses 780 tons of a chemical bonding agent each year Monthly demand fluctuates between 50 and 80 tons The lead time for each order is one month, and the economic order quantity is 130 tons Required 1 Determine the safety stock appropriate for the chemical bonding agent 2 At ...

1 Safety stock The lead time is one month so the safety stock is equal to the difference be ...

Andrew and Fulton, Inc., uses 780 tons of a chemical bonding agent each year. Monthly demand fluctuates

Question:

Andrew and Fulton, Inc., uses 780 tons of a chemical bonding agent each year. Monthly demand fluctuates between 50 and 80 tons. The lead time for each order is one month, and the is 130 tons.

Required:
1. Determine the safety stock appropriate for the chemical bonding agent.
2. At what order point, in terms of tons remaining in inventory, should Andrew and Fulton, Inc., order the bonding agent?

Economic Order Quantity
Economic order quantity (EOQ) is the ideal order quantity a company should purchase to minimize inventory costs such as holding costs, shortage costs, and order costs. This production-scheduling model was developed in 1913 by Ford W. Harris and has...