Question: WK 4 Collaboration: Cash Conversion Discussion Read Chapter 1 4 of the textbook by Gitman & Zutter. ST 1 4 2 EOQ analysis Thompson Paint

WK4 Collaboration: Cash Conversion Discussion
Read Chapter 14 of the textbook by Gitman & Zutter.
ST142 EOQ analysis Thompson Paint Company uses 60,000 gallons of pigment per year. The cost of ordering pigment is $200 per order, and the cost of carrying the pigment in inventory is $1 per gallon per year. The firm uses pigment at a constant rate every day throughout the year.
a. Calculate the EOQ.
b. Assuming that it takes 20 days to receive an order once it has been placed, deter- mine the reorder point in terms of gallons of pigment. (Note: Use a 365-day year.)

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