Atech Service sells professional cleaning machines and scouring agents. They deliver the scouring agents to customers on a fixed weekly schedule.
The annual demand is 1,500 bottles, each with a value of $10. The fixed cost for each order placed at the supplier’s is $100. The lead time is 2 weeks.
a) Assuming that the holding cost is $10/year and bottle, calculate late the economical order size?
b) Calculate the reorder point.