Hurricane Company produces skateboards and purchases 13,200 units of a wheel bearing each year at a cost of $5 per unit. Hurricane requires a 11% annual rate of return on investment. In addition, the relevant carrying cost (for insurance, materials handling, breakage, etc.) is $0.22 per unit per year. The relevant ordering cost per purchase order is $37.10. Read the requirements. II. Requirements cost per purchase order, C = Carrying cost of one unit in stock, Q = Any order quantity) 1. Calculate Hurricane's EOQ for the wheel bearing. 2. Calculate Hurricane's annual relevant ordering costs for the EOQ calculated in requirement 1. 3. Calculate Hurricane'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 there is no need for safety stocks. The purchase-order lead time is half a month. Calculate Hurricane's reorder point for the wheel bearing. Print Done Requirement 1. Calculate Anchor's EOQ for the wheel bearing. Begin by selecting the formula used to calculate EOQ. (D = Demand in units for one year, P = Ordering cost per purchase order, C = Carrying cost of one unit in stock, Q = Any order quantity) 2DP EOQ= (Round the denominator to the nearest cent and your final answer to the nearest whole number.) The EOQ for the wheel bearing is 2,169 units. Requirement 2. Calculate Anchor's annual relevant ordering costs for the EOQ calculated in requirement 1. Begin by selecting the formula used to calculate annual ordering costs. (D = Demand in units for one year, P = Ordering cost per purchase order, C = Carrying cost of one unit in stock, Q = Any order quantity) Annual relevant ordering costs = olo x P (Round your answer to the nearest dollar.) The relevant annual ordering costs amount to $ 304 Requirement 3. Calculate Anchor's annual relevant carrying costs for the EOQ calculated in requirement 1. Begin by selecting the formula used to calculate annual relevant carrying costs. (D = Demand in units for one year, P = Ordering cost per purchase order, C = Carrying cost of one unit in stock, Q = Any order quantity) Annual relevant carrying costs = No c (Round your answer to the nearest dollar.) The relevant annual costs costs amount to $ 304 Requirement 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 half a month. Calculate Anchor's reorder point for the wheel bearing. Determine the formula used to calculate the reorder point for reordering the wheel bearing, then calculate the reorder point. (Enter the formula values to one decimal point and the reorder point to the nearest whole number.) Demand per month X Purchasing lead time (months) Reorder point 1,900 X 0.5 950 units
