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.StarexCompany'sannualmaterialrequirementusedinproductionis144,000units.This materialcostsP200perunitfrom asupplieranditrequires5daysleadtimefrom dateof ordertodateofdelivery.TheorderingcostisP150perorderandthecarryingcostsis5% of inventoryinvestmentperunit. Determine the following: a. Economic order quantity b. Frequency of order c. Total ordering costs for the year
.StarexCompany'sannualmaterialrequirementusedinproductionis144,000units.This
materialcostsP200perunitfrom asupplieranditrequires5daysleadtimefrom dateof
ordertodateofdelivery.TheorderingcostisP150perorderandthecarryingcostsis5% of
inventoryinvestmentperunit.
Determine the following:
a. Economic order quantity
b. Frequency of order
c. Total ordering costs for the year
d. Reorder point assuming a safety stock equal to days requirement
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