joe Henry’s machine shop uses 2540 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 2,540
Holding cost per bracket per year $ 1.30
Order cost per order $ 18.00
Lead time 2days
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? _____ units
(round your response to two decimal places). 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?
______orders (round your response to two decimal places). What
would be the annual order cost? $ _____ (round your response to two
decimal places).
d) Given the EOQ, what is the total annual cost of managing
(ordering and holding) the inventory? $_______ (round your response
to two decimal places)
. e) What is the time between orders? _____ days (round your
response to two decimal places).
f) What is the reorder point (ROP)? ______ units (round your
response to two decimal places).