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Sells 360,000 tennis balls per year. The tennis balls cost Dennis Sport World RM15 per dozen. Annual inventory carrying costs are 20% of inventory price. The cost of placing and receiving an order are RM72. Assuming the inventory replenishment occurs virtually instantaneously. Based on recent experience, Dennis Sport World uses 7 days delivery time for planning purposes. (Assume 360 days in a year)
Question a) Calculation of the Economic Order Quantity?
Question b) Calculation of the number of orders to be placed?
Question c) Calculation of the total annual inventory costs?
Question d) Determination of the reorder point?
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