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1.b. We expect one of our products to have an annual demand or 10 000 units. It costs $15 to place another order, with a lead

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Answer #1

DEMAND = 10000
ORDERING COST = 15
HOLDING COST = 2.5
COST PER UNIT = 25

1. EOQ = SQRT(2 * DEMAND * ORDERING COST / HOLDING COST) = SQRT(2 * 10000 * 15 / 2.5) = 346

2. SINCE THE WORKING DAYS ARE NOT GIVEN, I HAVE ASSUMED 365 DAYS AS THE NUMBER OF WORKING DAYS

DAILY DEMAND = DEMAND / NO. OF WORKING DAYS = 10000 / 365 = 27.4
REORDER POINT = DAILY DEMAND * LEAD TIME = 27.4 * 20 = 548

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