Discuss the challenges of using the eoq concept

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Reference no: EM133357094

Black Diamond Manufacturing Company operated their inventory replenishment process utilizing the economic order quantity and re-order point methodology. The supply chain team has provided the following key data to calculate the newest EOQ order quantity and re-order point (ROP):

1. Item Number 621249 - PSV Valve: Annual demand in units = 10,000 Estimated internal ordering cost per order = $75.00 Cost per unit = $1,500 Estimated internal inventory carrying cost = 15% Suppler lead time (T) = 10 days Safety stock = 200 units

2. For a perpetual review system, calculate the re-order point where the average performance cycle length (T) equals 20 days.

3. Discuss the challenges of using the EOQ concept from an assumption perspective

Reference no: EM133357094

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