Optimal Order size = Economic Order Quantity =
Hence,
EOQ =
EOQ = 1291.87 = 1292 units
Total number of orders needed to be placed = 8703 / 1292 = 7.0641 = 7 orders
Number of days between the orders = 352 / 7 = 50.28 = 50 days.
Minimum Total Cost = (S x Number of Orders) + (H x EOQ/2) = 163 x 7 + (1.7 x 1292 / 2) = 1141 + 1098.2 = $ 2239.2
Reorder Point = d x L
Where d = demand for 1 day
R = 8703 x 4/ 352 = 98.89 = 99 units
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