Part V $-$ EOQ Calculations $(18$ points $-20$ minutes$)$

Clothes, Inc., has an average annual demand for red, medium polo shirts of $25,000$ units. The cost of placing an order is $$80$ and the cost of carrying one unit in inventory for one year is $$25.$

Required:

a$.$ Use the economic$-$order$-$quantity model to determine the optimal order size.

Economic order quernity $=59$ reat of $2$ Able

$A=$anmads requrimentes

$B=$ orderineng cests

$C=$ cenreging cest per unty

EOQ$=$SaRed$+(225,00080125)$

$\sqrt[\phantom{2}]{160,000}$

$=400$

b$.$ Determine the annual relevant total cost.

c$.$ Determine the reorder point assuming a lead time of $2$ days and a work year of $250$ days.