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Inventory Control Practice Questions

Question $1$: Retail Inventory Question $2$: Warehouse Stock

Management

Control

A retail store sells a popular product with $an$

annual demand $of12,000$ units. The cost $to$

place $an$ order $is$ $$150,$ and the holding cost $is$

$$5$ per unit per year. The lead time for restock$-$

ing $is5$ days, and the store operates $300$ days

per year.

Given Data

Annual demand $(D)=12,000$ units

Ordering cost per order $(S)=$$$150$

Holding cost per unit per year $(H)=$$$5$

Lead time $(L)=5$ days

Operating days per year $=300$ days

Formulas

Economic Order Quantity $(EOQ)$:

EOQ$=\sqrt[\phantom{2}]{\frac{2DS}{H}}$

Reorder Point $(ROP)$: ROP $=$

Daily demand $$ Lead time

Tasks

$(a)$ Calculate the Economic Order Quantity

$(EOQ)$ for the product. Round $to$ the

nearest whole number.

$(b)$ Determine the Reorder Point $(ROP)in$

units. Round $to$ the nearest whole num$-$

ber.

A warehouse manages a specific item with $an$

annual demand $of6,500$ units. The ordering

$costis$ $$80$ per order, and the holding cost $is$

$$3$ per unit per year. The lead time $is10$ days,

and the warehouse operates $260$ days per year.

Given Data

Annual demand $(D)=6,500$ units

Ordering cost per order $(S)=$$$80$

Holding cost per unit per year $(H)=$$$3$

Lead time $(L)=10$ days

Operating days per year $=260$ days

Formulas

Economic Order Quantity $(EOQ)$:

EOQ$=\sqrt[\phantom{2}]{\frac{2DS}{H}}$

Reorder Point $(ROP)$: ROP $=$

Daily demand $$ Lead time

Tasks

$(a)$ Calculate the Economic Order Quantity

$(EOQ)$ for the item. Round $to$ the near$-$

est whole number.

$(b)$ Determine the Reorder Point $(ROP)in$

units. Round $to$ the nearest whole num$-$ Question $3$: Pharmaceutical $In-$ Question $4$: Electronics Compo$-$

ventory

nent Inventory

A pharmacy stocks a medication with $anan-$

nual demand $of9,000$ units. The cost per order

$is$ $$200,$ and the holding cost $is$ $$6$ per unit per

year. The lead time for delivery $is7$ days, and

the pharmacy operates $365$ days per year.

Given Data

Annual demand $(D)=9,000$ units

Ordering cost per order $(S)=$$$200$

Holding cost per unit per year $(H)=$$$6$

Lead time $(L)=7$ days

Operating days per year $=365$ days

Formulas

Economic Order Quantity $(EOQ)$:

EOQ$=\sqrt[\phantom{2}]{\frac{2DS}{H}}$

Reorder Point $(ROP)$: ROP $=$

Daily demand $$ Lead time

Tasks

$(a)$ Calculate the Economic Order Quantity

$(EOQ)$ for the medication. Round $to$ the

nearest whole number.

$(b)$ Determine the Reorder Point $(ROP)in$

units. Round $to$ the nearest whole num$-$

ber.

$An$ electronics manufacturer uses a component

with $an$ annual demand $of15,000$ units. The

ordering cost $is$ $$120$ per order, and the hold$-$

ing cost $is$ $$2$ per unit per year. The lead time

$is6$ days, and the company operates $250$ days

per year.

Given Data

Annual demand $(D)=15,000$ units

Ordering cost per order $(S)=$$$120$

Holding cost per unit per year Question $5$: Grocery Store Inven$-$

tory

A grocery store manages a perishable item with

$an$ annual demand $of10,000$ units. The order$-$

ing cost $is$ $$90$ per order, and the holding cost

$is$ $$4$ per unit per year. The lead time $is4$ days,

and the store operates $360$ days per year.

Given Data

Annual demand $(D)=10,000$ units

Ordering cost $p$ Question $7$: Textile Inventory

Management

A textile factory uses a raw material with $an$

$5$annua