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 5000 units, unit cost is 200, carrying cost is considered to be approximately as 25% of the unit price. Order costs for his company typically, run nearly 50 per order and lead-time averages 10 days. Assume a 50-week and 250 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.
 Purchasing in logistics - EOQ (Economic Order Quantity) model Jan Kowalski

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