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Question: Annual demand for product X is 4, 000 units which cost P 90.00 per unit and the inventory carrying cost is P9.00. Study reflects that the ordering costs is P 25.00 per order which take 5 working days for the order to arrive from the supplier. During this time the demand for product X is approximately 80 units. Find the following:
a.) EQQ
b.) Average Inventory if the EQQ is used.
c.) The optimal number of order per year.
d.) Optimal number of days between any orders, assuming 250 working days per year
e.) Total inventory cost (carrying cost + ordering cost)
f.) What is the re-order point?
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