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Determine the appropriate reorder point

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Question - Management at Ardmore Farm and Seed has never analyzed the costs associated with their inventory policy, and they currently have a large stock of insecticide in the warehouse. They estimate that it costs $20 to place an order, and it costs $0.2 per gallon to hold the spray. The firm requires 80,000 gallons for the year (assume 365 days).

Calculate EOQ.

Calculate the total cost of inventory implied by the EOQ from a.

If it takes 10 days to receive an order from suppliers, determine the appropriate reorder point.

Reference no: EM132916083

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