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Consider the following inventory information and relationships for Brooke Army Medical Center: 1. Orders can be placed only in multiples of 100 units. 2. Annual
Consider the following inventory information and relationships for Brooke Army Medical Center: 1. Orders can be placed only in multiples of 100 units. 2. Annual usage is 250,000 (assume a 360 day year in your calculations) 3. The carrying cost is 30 percent of the purchase price of goods. 4. The purchase price is $10 per unit. 5. The ordering cost is $175 per order. 6. The desired safety stock is 1,000 units (this does not include delivery time stock). a. What is the economic order quantity? b. How many orders will be placed annually?
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