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Determine the economic order quantity for evans

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Question - Evans Company has the following information

Annual Demand.........4,000 units

Order size...................1,000 units

Ordering cost per order.......$500

Carrying costs per unit for one year.......$50

Lead time (maximum 20 days)................10 days

Maximum daily use................................25 units

Work year...............................................250 days

1) Determine the economic order quantity for Evans.

2) What is the annual saving to evans company if it was to change from an order size of 1,000.

3) What is the reorder point.

4) What is the safety stock needed to prevent stockouts?

Reference no: EM131807042

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