What is the inventory order point

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Reference no: EM131309734

Knutson Products Inc. is involved in the production of airplane parts and has the following inventory, carrying and storage costs:

1. Orders must be placed in round lots of 100 units.

2. Annual unit usage is 350000? (Assume a? 50-week year in your calculations.)

3. The carrying cost is 10 percent of the purchase price.

4. The purchase price is ?$10 per unit.

5. The ordering cost is $500 per order.

6. The desired safety stock is 5000 units. ? (This does not include delivery-time stock.)

7. The delivery time is 4 week.

Given the foregoing information:

a. Determine the optimal EOQ level.

b. How many orders will be placed annually?

c. What is the inventory order point ? (That is, at what level of inventory should a new order be placed?)

d. What is the average inventory level?

Reference no: EM131309734

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