Question: course name: Leadership & Operational Development. Question; Two inventory policies have been proposed by the purchasing department of a company: Policy-1: Oder 150 units, given

course name: Leadership & Operational Development.

Question;

Two inventory policies have been proposed by the purchasing department of a company:

Policy-1: Oder 150 units, given a re-order point of 50 units and a lead time of 10 days.

Policy-2: Order 200 units, given a re-order point of 75 units and a lead time of 15 days.

The setup cost per order is $20, and the holding cost per unit inventory per day is $0.02.

Determine the followings:

(1) What is Economic Order Quantity (EOQ) policy that the company should adopt?

(2) Support your answer with a proper reason/comment why the company should adopt what addressed in part (1)

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