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Fan World (FW) operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now considering inventory decisions
Fan World (FW) operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now considering inventory decisions for its soccer jerseys product line. This is a highly popular item. Data for 2018 are: (Click the icon to view the information.) Each jersey costs FW 543 and sells for $85. The $10 carrying cost per jersey per year comprises the required return on investment of $5.16 ( = 12% of $43 purchase price) plus $4.84 in relevant insurance, handling, and theft-related costs. The purchasing lead time is 7 days. FW is open 364 days a year. Required The EOQ for soccer jerseys is 1226 jerseys. (Round your answer to the nearest whole number.) Requirement 2. Calculate the number of orders that will be placed each year. (Round your answer up to the nearest whole number.) Determine the formula used to calculate the number of orders that will be placed each year, and then calculate the orders per year. Number of orders Annual demand 44,200 36 orders per year EOQ 1,226 Requirement 3. Calculate the reorder point. (Round the demand per day to two decimal places. Round your final answer up to the nearest whole number.) Determine the formula used to calculate the reorder point for the jerseys, and then calculate the reorder point. = Reorder point jerseys
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