Economic order quantity for retailer. Football World (FW) operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now considering inventory decisions for its Toronto Argos’ jerseys product line. This is a highly popular item. Data for 2007 are Expected annual demand for jerseys 12,000 Ordering costs per purchase order $270 Carrying costs per year $ 12 per jersey Each jersey costs FW $48 and sells for $90. The $12 carrying cost per jersey comprises the required annual return on investments of $5.76 (12% X $48 purchase price) plus $6.24 relevant insurance, handling costs, and theft-related costs. The purchasing lead time is one week. FW is open 365 days a year.

Required 1. Calculate the EOQ.

2. Calculate the number of orders that will be placed each year.

3. Calculate the reorder point.