Assignment:
Joe Henry's machine shop uses 2,490 brackets during the course of a year. These brackets are purchased from a supplier 90 miles away. The following information is known about the brackets:
Annual Demand 2490
Holding cost per bracket per year $1.65
Order cost per order $19.00
Lead Time 2 days
Working days per year 250
a. What is the EOQ? units (round your response to two decimal places).
b. What is the average inventory if the EOQ is used? What would be the annual inventory holding cost? $ (round your response to two decimal places).
c. Given the EOQ, how many orders will be made annually? What would be the annual order cost?
d. Given the EOQ, what is the total annual cost of managing (ordering and holding) the inventory?
e. What is the time between orders?
f. What is the reorder point (ROP)?