Question
A company uses an EOQ inventory system for its popular product. The daily demand for the product is 25 units per day. The company buys
A company uses an EOQ inventory system for its popular product.
The daily demand for the product is 25 units per day.
The company buys the product from a supplier for $40 per unit with an order lead time of 6 days
The order quantity is 900 units per order.
The unit holding cost is $7 per unit per year.
Assume that the company operates 7 days a week.
Show a brief calculation and explanation. Do not attach any Excel document.
Use at least 4 decimals when necessary. Do NOT round anything.
What is the time between orders?
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An Introduction to the Mathematics of Financial Derivatives
Authors: Ali Hirsa, Salih N. Neftci
3rd edition
012384682X, 978-0123846822
