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Q. Barbara Bright is the purchasing agent for West Valve Organization. West Valve sells industrial valves also fluid control devices. One of the most popular valves is the Western, which has an annual demand of 4,000 units. The cost of each valve is $90 also the inventory carrying cost is estimated to be 10% of the cost of each valve. Barbara has made a study of the costs involved in placing an order for any of the valves which West Valve stocks also she has concluded which the average ordering cost is $25 per order. Furthermore, it takes about two weeks for an order to arrive from the supplier also during this time the demand per week for
West valves is approximately 80. Compute the EOQ, ROP, optimal number of orders per year also total annual cost for Western valves.
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