Question: Little EOQ calculation. Consider the EOQ model. Order quantity is 20 units, daily demand is 4 units, and the lead time is 2 days. Holding

Little EOQ calculation.

Consider the EOQ model. Order quantity is 20 units, daily demand is 4 units, and the lead time is 2 days. Holding a unit of the item in inventory for a full year costs 1.5 AED. Assume a year to be 365 days. Also, assume regular operations every day of the week.

a. What is the reorder point?

b. What is the average inventory level?

c. What is the length of an order cycle?

d. What is the annual cost of holding inventory?

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