I L - Js + A B D E F G . I J K 1 The FOQ (Fixed Order Quanitity) Model 2 Annual demand = 500 units D 500 3 Order cost = $30 per order S $ 30.00 TC = H 4 Cost of one unit $ 50.00 5 Holding cost = 25% of Unit cost H $ 12.50 2DS EOQ 6 There are 250 day in the year d 250.00 H 7 8 What is the order quantity (EOQ) that minimizes the combined ordering and holding costs? 9 10 What is the total annual ordering cost? 11 What is the total annual holding cost? ROP = d x LT 12 What is the total annual cost? 13 14 What is the reorder point if the lead time to place and receive a new order is 5 days. 15 16 17 Assuming a 250-day year, how many orders should be processed per year? What is the expected time between orders? 18 orders days 19 20 21 22 23 24 Ordering Policy The FOQ Model Quantity Discount