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Student No: 2. For supply item ABC, Andrews Company has been ordering 125 units based on the recommendation of the salesperson who calls on the
Student No: 2. For supply item ABC, Andrews Company has been ordering 125 units based on the recommendation of the salesperson who calls on the company monthly. A new purchasing agent has been hired by the company who wants to start using the economic order quantity method and its supporting decision elements. She has gathered the following information: Annual demand in units Days used per year Lead time, in days Ordering costs Annual unit carrying costs 250 250 10 $100 $20 Required: Determine the EOQ, average inventory, orders per year, average daily demand, reorder point, annual ordering costs, and annual carrying costs. (14 marks)
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