Question: 6. Joes Electronics examines its inventory policy and considers using an economic order quantity (EOQ) approach. They have the following information about their bestselling model

6. Joes Electronics examines its inventory policy and considers using an economic order quantity (EOQ) approach. They have the following information about their bestselling model of televisions:

Annual demand - 4000 sets

Current order quantity - 80 sets

Carrying cost - $80.00/set/year

Order cost - $200

Lead time - 6 days

Operating days per year - 300 days

a. What is the current total annual cost (TC) at the current order quantity?

b. What is the economic order quantity (EOQ)?

c. What is the total annual cost at the economic order quantity (EOQ)?

d. What is the reorder point at the economic order quantity (EOQ)?

e. How much money will be saved by ordering the EOQ?

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