Question
PQR Retail sells a product with the following data: Annual demand: 10,000 units Ordering cost per order: $100 Carrying cost per unit per year: $2
PQR Retail sells a product with the following data:
Annual demand: 10,000 units
Ordering cost per order: $100
Carrying cost per unit per year: $2
Lead time: 5 days (Assume 365 days in a year)
Safety stock: 50 units
Required: a. Calculate the Economic Order Quantity (EOQ). b. Determine the total number of orders to be placed in a year. c. Compute the reorder point. d. Discuss the benefits and limitations of using EOQ in inventory management.
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Operations Management
Authors: William J Stevenson, Mehran Hojati
4th Canadian edition
978-1259270154, 1259270157, 978-0071091428
