A table factory requires 500 logs per year. Each time an order for logs is placed, an ordering cost of $20 is incurred. Each log costs $12 and the holding cost is $2/log/year. Assume that demand occurs at a constant rate and shortages are not allowed and the lead time is zero.

(a) If the quantity ordered is 150 units, calculate the total cost incurred (including ordering costs, purchasing costs and holding costs).

(b) What is EOQ?

(c) What is the minimum total cost?

(d) What is the number of cycles in a year, when EOQ is used as the order quantity?

(e) What is the duration of each cycle (in months)? (f) If the lead time (L) is 2 months, what will be the new reorder point? (g) If the lead time (L) is 3 months, what will be the new reorder point?