=+17-18 K EOQ for a retailer OBJECTIVE 2 Peters of Persia (PoP) sells fabrics to a wide range of industrial and consumer users. One of the products it carries is denim cloth, used in the manufacture of jeans and carrying bags. The supplier for the denim cloth pays all incoming freight. No incoming inspection of the denim is necessary because the supplier has a track record of delivering high-quality merchandise. The purchasing officer at PoP has collected the following information:

Annual demand for denim cloth 27 500 metres Ordering cost per purchase order $195 Carrying cost per year 22.5% of purchase costs Safety-stock requirements None Cost of denim cloth $14.75 per metre The purchasing lead time is two weeks. PoP is open 250 days a year (50 weeks for five days a week).

Required 1 Calculate the EOQ for denim cloth.