1. Ricky Orange’s annual demand is 12,500 units. Ordering cost is $100 per order.

Holding cost is estimated at 20% of product cost which is $50 per unit. What is the number of orders per year using EOQ to compute the best quantity to order? What is the annual holding cost? What is the reorder point? Assume four weeks/month, lead time L is one week and demand rate is 250 units per week.