Q$1$: Suppose that $$1,000$ of a particular item is used each year, the order costs are $$25$ per order submitted, and inventory carrying costs are $20\%.$ What is the EOQ $($dollar$/$order size$)?$

EOQ$=\sqrt[\phantom{2}]{2A\frac{B}{C}}=\sqrt[\phantom{2}]{2*1000*\frac{25}{20}\%}=500\frac{\text{\$}}{S}iz$

Q$2$: Using the same information as in the previous question, and assuming that the product has a cost of $$5$ per unit. What is the EOQ $($unit$)?$ Annual unit

EOQ$=r$

SS

DD

Q$3$: Assuming that there is an EOQ of $120$ units, safety stock of $60$ units, average demand of $30$ units per day, and a replenishment $($order cycle$)$ of $2$ days. What is the reorder point?

ROP $(Re$ arderpoint$)=(DDRC)+SS$

$=302+60$

$=120$