Problems:

Antique manufacturers old-fashioned, rotary telephones for use in movie scenes (and other displays). Worldwide demand is 44,000 phones per year. The rotary dial on each phone costs $0.75. Set up costs are $8. The carrying costs are 12%.

Your Answers

1. What is the economic order quantity (EOQ)?

2. What are the annual order costs?

3. What are the annual carrying costs?

4. If Antique operates 250 eight-hour days per year and the lead time is eight days, what is the simple ROP (no uncertainty)?