Question: For a certain item, the cost-minimizing order quantity obtained with the basic EOQ model is 200 units, and the total inventory cost without material cost

  1. For a certain item, the cost-minimizing order quantity obtained with the basic EOQ model is 200 units, and the total inventory cost without material cost is $200. Holding cost as a fraction of unit cost is 20%, unit cost is $5, and fixed cost is $10. What is the annual demand for this item?
  2. Reconsider, if the Lead time to receive the items is 2 weeks and company operates 40 weeks per year, what is the Reorder Point (R)?

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