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A machine shop uses 2500 brackets during the course of a year, and this usage is constant throughout the year. These brackets are purchased from a supplier for OMR 15 each, and the lead time is 2 days. The holding cost per bracket per year is 10%, the ordering cost is OMR 19 per order. There are 260 working days per year.
a) Determine the EOQ (item is a discrete unit).
b) What is the average inventory?
c) What is the time between orders?
d) What is the Reorder Point.
e) The delivery vehicle has a capacity for 200 brackets. By how much should the ordering cost be reduced so that the economic order quantity can be delivered in one vehicle?
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