The Robney Company is a restaurant supplier that sells a number of products to various restaurants in the area. One of its products is a special meat cutter with a disposable blade.

The blades are sold in packages of 12 blades for $20.00 per package. After a number of years, it has been determined that the demand for the replacement blades is at a constant rate of 2,000 packages per month. The packages cost the Robney Company $10.00 each from the manufacturer and require a 3-day lead time from date of order to date of delivery. The ordering cost is $1.20 per order, and the carrying cost is 10% per year.

Robney is going to use the economic order quantity formula: pg852

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EOQ Required: = 2(Annual requirements)(Cost per order) (Price per unit)(Carrying cost) a Calculate: 1 The economic order quantity 2 The number of orders needed per year 3 The total cost of buying and carrying blades for the year b Assuming there is no reserve (safety stock) and that the present inventory level is-200 packages. when should the next order be placed? (Use 360 days = 1 year.)