A equipment manufacturing company estimates annual demand for its product to be 48,000 units, at a price of $4 per unit. Its carrying cost is 15% of its inventory and ordering cost is $9 per order.

What is the most economical number of units to order?

If it takes 12 days to get an order, what is the reorder point?

Explain the importance of obtaining the economic order quantity and the reorder point.