Economic Order Quantity (EOQ) TC = D*C + (D/Q) *S + (Q/2) *H You are a new inventory manager at a Florist. You want to use EOQ to compute the best quantity of flowers to order. The old manager used to order 1000 flowers per month to match demand. The flowers have a high ordering cost of $300 per order and a holding cost of 15% of product cost annually and a product cost of $60 per unit. What would be your order quantity? How many orders would you place per year? What is the annual holding cost? Assuming that there are 4 weeks per month, and a lead time of 1 week, what is the reorder point? Using the above equation, to also calculate what the Safety Stock would be at a 95% service level. Part II Economic Production Quantity (EPQ) TC = D * C + (D / Q) * S + (Imax / 2) * H A bicycle manufacturer uses 50,000 wheels per year for its popular cycle. The firm can make its own wheels, which it can produce at 600 per day. Assembly is uniform numbers over the entire year. The carrying cost is $1.00 per wheel per year, and the setup cost for a production run of wheels is $45. Consider that the plant operates 250 days per year, what is the order quantity and Imax? Using the same numbers, calculate the Average Inventory per day to determine inventory performance.