Your company has two key products. Your team is being asked to determine the equilibrium order quantity for each product. Product #1s total year sales are 35,000 units. Its restocking cost is $35 per order. Its carry cost is $2.50 per unit. Product #2s total year sales are 12,000 units. Its restocking cost is $26 per order. Its carry cost is $2.50 per unit.

How much is the equilibrium order quantity for product #1?

How much are its total restocking cost, total order costs and Total costs?

How many days are there between orders with 1 decimal point? Ex 12.5 days

Hint (EOQ/total sales) x 365

How much is the equilibrium order quantity for product #2?

How much is its total restocking cost, total order costs and Total costs?

How many days are there between orders with 1 decimal point? Ex 12.5 days

One of the managers suggested ordering both on the same day.

Choice #1 order product #2 same number of days between orders as for product #1

If this choice is implemented how much is the increase in total cost for product #2

Choice #2 order product #1 on days between orders as for product #2

If this choice is implemented how much is the increase in total cost for product #1.

Do you recommend Choice #1 or Choice #2 or neither? Why?