1. Calculate the Economic Order Quantity (EOQ) for the following scenario:

Procurement Process Cost: $1,000

Daily Demand: 48 units

Inventory Holding Cost: $35/year

2. A. Calculate the Economic Order Quantity (EOQ) for the following scenario:

Procurement Process Cost: $500

Daily Demand: (units) Calculate from the data table provided

Total Inventory Holding Cost: $25/year

B.1. If you wait until you reach zero (or below) as your reorder point, how many times do you stock-out during the year? (Assume you instantaneously restock)

B.2. What are your annual holding costs?

C. Given the lead times below, along with 95% reliability of stock on-hand, calculate your Safety Stock (SS) and Reorder Point (R).

• Procurement Leadtime (PLT) – 1 day
• Manufacturer Leadtime (MLT) – 7 days
• Shipping/Transportation Leadtime (SLT) – 5 days

D. Run your new order model and answer the following questions:

1. Do you experience a stock-out?

2. What is the observed lowest on-hand quantity?

3. What are your new annual holding costs?