Question: Benitez Security Systems has an annual demand for camera security systems of 1424 units. The cost of typical camera security systems is $ 499. The

Benitez Security Systems has an annual demand for camera security systems of 1424 units. The cost of typical camera security systems is $ 499. The handling cost is estimated to be 16% of the unit cost and the ordering cost is $ 30 for each order. If the owner orders quantities of 250 or more, he can get a 5% discount on the cost of the camera security systems. The company operates 300 days a year and the waiting time to receive an order from the supplier is 10 business days.

1. What is the economic order quantity (EOQ) without discount? Answer

2. What is the total annual cost (ATC) without the discount? Answer

3. What is the discounted total annual cost (ATC)? Answer

4. What is the optimal order quantity to minimize the cost of managing inventory? Answer

5. What is the ROP reordering point?

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