Question: Purchasing in logistics - EOQ ( Economic Order Quantity ) model Jan Kowalski is attempting to perform an inventory analysis on one of his most
Purchasing in logistics EOQ Economic Order Quantity model
Jan Kowalski is attempting to perform an inventory analysis on one of his most popular products. Annual demand for this product is units, unit cost is carrying cost is considered to be approximately as of the unit price. Order costs for his company typically, run nearly per order and leadtime averages days. Assume a week and days' year.
a What is the economic order quantity?
b What is the reorder point?
c What is the total carrying and ordering cost?
d What is the optimal number of orders per year?
e What is the optimal number of days between orders?
Hint: Use EOQ model for economic order quantity with constant demand.
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