EOQ:

An item has the following information:

Ordering cost/order, S = $100/order Annual demand, D = 240,000 units/year

Carrying cost/unit-year, H = $0.40/unit-yr Lead time = 9 days

Assume 300 working days in a year.

Determine:

(1) The EOQ.

(2) The ROP.

(3) Number of orders per year.

(4) Number of days between orders.

(5) Ordering cost per year.

(6) Carrying cost per year.

(7) Total cost per year.

(8) Average inventory.

Inventory turnover.

The price/unit if the carrying cost %/year = 40%.

(11) How much is the % increase in the total cost per year if the ordering quantity is (a) 10% less than EOQ, and (b) 10% more than EOQ.