Question: In the basic EOQ model, if annual demand is 250, carrying cost is $4 per unit per year, and ordering cost is $25, what are:

In the basic EOQ model, if annual demand is 250, carrying cost is $4 per unit per year, and ordering cost is $25, what are:

The EOQ?
The Total Minimum Annual Inventory Cost?

A product has an annual demand of 3600 units. Unit cost for this product is $3. Set up cost is $20 and the inventory carrying rate as a percent of the unit cost is 25%. The product is produced in-house where the daily production rate is 50 units. Assume 360 working days per year. Determine the following:

1. The annual ordering cost

2. The production run length in days each time the product is produced.

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