ST14 - 2 EQ analysis . Thompson Paint Company uses 60 000 gallons of pigment per year . The cost of ordering pigment is $200 per order and the cost of carrying the pigment in inventory is SI per gallon per year . The firm uses pigment at a constant rate every day throughout the year a . Calculate the EDQ b . Assuming that it takes 20 days to receive an order once it has been placed , determine the reorder point in terms of gallons of pigment . ( Note : Use a 360 - day year . )