Calculate the economic order quantity

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Reference no: EM133005224

Question - A business located in the city has a daily demand for bottled waters of 144 units, so you want to determine the optimal quantity to order from the supplier, knowing the following information.

The supplier ships in boxes of 10 units.

The cost per box is US $ 3 and a cost of US $ 20 is incurred each time a purchase order is placed.

The storage cost per box reaches 25% of the acquisition price. The business operates 5 days a week, for 50 weeks a year.

The provider replacement time is five days.

Required -

a) Calculate the Economic order quantity.

b) Calculate the Orders that must be made annually and how often.

c) Calculate the Inventory level at which a new order must be requested (ROT).

d) Calculate the Total cost.

Reference no: EM133005224

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