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Dogtopia, a doggy day care, uses small trash bags at an average rate of 95 units per day, with an annual total of 28,500 units used during its 300 production days each year. The ordering costs amount to $60 and carrying costs are $5 per unit per year. Lead time is 3 days. Answer the following without assuming variability in demand or lead time.
1) What is the Economic Order Quantity (EOQ)?
2) What is the annual holding cost at the EOQ?
3) What is the average inventory level?
4) How many orders will be made each year?
5) What is the annual ordering cost at the EOQ?
6) How long is the order cycle?
7) What is the annual total cost at the EOQ?
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An analysis of the holding costs, including the appropriate annual holding cost rate.
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