The Cloth Banaza sells fabrics to a wide range of industrial and consumer users. One of the products it carries is denim cloth, used in the manufacture of jeans and carrying bags. The supplier for the denim cloth pays all incoming freight. No incoming inspection of the denim is necessary because the supplier has a track record of delivering high-quality merchandise. The purchasing officer of the Cloth Banaza has collected the following information:

Annual demand for denim cloth: 29,250 yards

Ordering cost per purchase order: $195

Carrying cost per year: 20% of purchase costs

Safety-stock requirements: None

Cost of denim cloth: $15 per yard

The purchasing lead time is 2 weeks. The Cloth Banaza is open 250 days a year (50 weeks for 5 days a week).

Requirement 1. Calculate the EOQ for denim cloth.

The EOQ for denim cloth is

yards.

Requirement 2. Calculate the number of orders that will be placed each year.

Determine the formula used to calculate the number of orders that will be placed each year, then calculate the orders per year.

Requirement 2. Calculate the number of orders that will be placed each year.

Determine the formula used to calculate the number of orders that will be placed each year, then calculate the orders per year.

=

Number of orders

=

orders per year

Requirement 3. Calculate the reorder point for denim cloth.

Determine the formula used to calculate the reorder point for denim cloth, then calculate the reorder point.

			=	Reorder point
			=		yards