Question
A company uses EOQ. Every time they place an order for widgets, they order 1,000 widgets. The cost of placing an order is $30. It
A company uses EOQ. Every time they place an order for widgets, they order 1,000 widgets. The cost of placing an order is $30. It cost $ 4.00 for a widget to sit in the warehouse for a year. On average, the company uses 50 widgets per day. The most widgets the company could ever use is 60. When an order is placed, it takes 4 days to receive the widgets. Annual usage is 13,000 units. Use this information to compute the following. A. Ordering Costs B. Carrying Costs C. Reorder point D. How many units of safety stock does the company need to keep on hand?
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