Neha Shah is the purchasing agent for a firm that sells industrial valves and fluid control devices.

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Neha Shah is the purchasing agent for a firm that sells industrial valves and fluid control devices. One of the most popular valves is the KA1, which has an annual demand of 6,000 units. The cost of each valve is $120 and the inventory carrying cost is estimated to be 8% of the cost of each valve. It also costs her an additional $45 each time she orders and it takes about two weeks for an order to arrive from the supplier. The demand for KA1 valves is approximately 120 per week. Compute the EOQ, ROP, optimal number of orders per year, and total annual cost for KA1 valves.
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Quantitative Analysis for Management

ISBN: 978-0132149112

11th Edition

Authors: Barry render, Ralph m. stair, Michael e. Hanna

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