Greenspace Company, which produces lawnmowers, purchases 15,007 units of a rotor blade part each year at a cost of $70 per unit. Greenspace requires a 20% annual rate of return on investment. Inaddition, the relevant carrying cost(for insurance, materialshandling, breakage, and soon) is $12 per unit per year. The relevant ordering cost per purchase order is $155.

Requirements

1. Calculate Greenspace's EOQ for the rotor blade part.

2. Calculate Greenspace's annual relevant ordering costs for the EOQ calculated in requirement 1.

3. Calculate Greenspace's 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 that there is no need for safety stocks. Thepurchase-order lead time is half a month. Calculate Greenspace's reorder point for the rotor blade part.

Thank you!