Question: Consider an item replenished according to the EOQ formula, which has an annual demand rate of 5,200 units and a lead time of 36 weeks.

Consider an item replenished according to the EOQ formula, which has an annual demand rate of 5,200 units and a lead time of 36 weeks. Suppose the EOQ for this item equals 2,600 units. What reorder point should be used?

An item costs $4 per unit, has a steady annual (deterministic) demand of 500 units, and is replenished according to the economic order quantity. The average annual cost associated with ordering and stocking this item (including variable procurement costs) equals $2400. What is the average annual fixed ordering (setup) cost incurred?

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