Marino Company predicts that it will use 25,000 units of material during the year. The expected daily
Question:
Marino Company predicts that it will use 25,000 units of material during the year. The expected daily usage is 200 units, and there is an expected lead time of five days and a desired safety stock of 500 units. The material is expected to cost $5 per unit. Marino anticipates that it will cost $50 to place each order. The annual carrying cost is $0.10 per unit.
Required:
1. Compute the order point.
2. Determine the most economical order quantity by use of the formula.
3. Calculate the total cost of ordering and carrying at the EOQ point.
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1 Order Point Expected Usage During Lead Time Safety Stock 200 units per day 5 days 500 u...View the full answer
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