Cutter Ski Company manufactures slalom water skis. For production of the Competition level skis, Cutter requires 8,700 aluminum fins each year at a cost of $6.69 per unit. The carrying cost (for things like insurance and materials handling,) is $0.12 per unit per year. The relevant ordering cost per purchase order is $43.50. Cutter requires a 9% annual rate of return on investment.

Required:

1. Calculate Cutters EOQ for the wheel bearing.
2. Calculate Cutters annual relevant ordering costs for the EOQ calculated in requirement 1.
3. Calculate Cutters annual relevant carrying costs for the EOQ calculated in requirement 1.
4. Assume that demand is uniform throughout the year and known with certainty so there is no need for safety stocks. The purchase-order lead time is two weeks. Calculate Cutters reorder point for the ski fins.

C Company manufactures slalom water skis. For production of the Competition level skis, Cutter requires 8,700 aluminum fins each year at a cost of $6.69 per unit. The carrying cost (for insurance, materials handling, etc.) is $0.12 per unit per year. The relevant ordering cost per purchase order is $43.50. C requires a 9% annual rate of return on investment.
Annual need for fins	8,700	fins
Ordering cost per purchase order	$ 43.50
Carrying cost (insurance, handling,etc.)	$ 0.12
Safety-stock requirements	None
Cost of fins	$ 6.69
Required Rate of Return for Cutter	9%
Purchasing lead time	2	weeks
C Company is open 350 days per year (50 weeks for 7 days a week).

Required Rate of Return
Carrying cost (insurance, handling,etc.)
			per fin per year
Economic Order Quantity:			fins
Orders per year			orders
Demand Each Working Day			fins
Demand per week			fins
Reorder point			fins