Case Study $4$ General Instructions

$1.$ Calculate the Economic Order Quantity $($EOQ$).$

a$.=$

$=$

$2$

$$

$2.$ Calculate the safety stock $($SS$)$ required for each shipping option $($LTL and TL$).$

a$.=$

$2+$

$2$

$2$

$3.$ Calculate the total cost for EOQ including product and transport $($T$)$ costs.

a$.=($

$$

$$

$)+($

$$

$2$

$+)++$

$4.$ Calculate the total cost for the minimum quantity $($only if higher than EOQ$)$ required to get a

quantity discount on shipping or product.

a$.$ Small quantities $0-1499$ units

i$.$ LTL Rates $0-9$ units, $10-19$ units, $20-39$ units, $40-99$ units, $100-199$ units, $200-499$ units

ii$.$ TL Rates $500-1499$ units

b$.$ First quantity discount $1500-2500$ units $(2\mathrm{.}5\%$ discount$)$

c$.$ Second quantity discount $2500+$ units $(5\%$ discount$)$