Question: Lexcor Pharmaceuticals is analyzing the demand for their B456 compound. Market analysis and review of past sales reveal that 15,000 is the average annual

Lexcor Pharmaceuticals is analyzing the demand for their B456 compound. Market analysis

Lexcor Pharmaceuticals is analyzing the demand for their B456 compound. Market analysis and review of past sales reveal that 15,000 is the average annual demand. The company requires a 10% rate of return. Further analysis regarding costs are: Purchase price per unit Orders per year Average daily demand Lead time in days Cost of placing an order $180 10 5 units 10 $35 Relevant insurance, handling costs $13 Required a. Calculate the EOQ for the B456 compound. b. What are the annual carrying costs for the product if the company orders at the EOQ amount? c. What are the annual ordering costs for the product if the company orders at the EOQ amount? d. What is the reorder point for the product?

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To calculate the Economic Order Quantity EOQ for the B456 compound we can use the EOQ formula EOQ 2 ... View full answer

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