Determine the value of the EOQ

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Reference no: EM133116871

Question: A bank uses a certain form at a uniform rate of 60 pads per week during each of the 52 weeks per year it is in operation. Every replenishment order it places is delivered at one time. No minimum inventory is carried. The cost of placing and receiving an order is $15. The purchase price is $ 2 per pad. The inventory carrying cost, in terms of an amount per pad per year, is estimated to be 25% of the unit purchase price is $2. The lead time is three weeks.

a. Determine the value of the EOQ
b. With the use of the given data and the calculated value of the economic lot size, determine the following:

1. Reorder point

2. Maximum inventory

3. Average inventory

4. Average number of orders per week

5. Average order cost per week

6. Average carrying cost per week

7. Relevant total average cost per week.

8. Relevant total average cost per year.

Reference no: EM133116871

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