Rose White's machine shop uses 2500 brackets during the course of the year, and this usage is relatively constant throughout the year. These brackets are purchased from a supplier 100 miles away for $15 each, and hte lead time is 2 days. The hold cost per bracket per year is $1.50 (or 10% of holding cost) and the ordering cost per order is $18.75. there are 250 working days per year.
a. What is hte EOQ?
b. Given the EOQ, what is the average inventory? What is the annual inventory holding cost?
c. In minimizing cost, how many orders would be made each year?
d. Given the EOQ, what is the total annual inventory cost (including purchase cost)?
e. What is the time between orders?
f. What is the ROP?