Homework Answers
| A. Computation of EOQ | ||
| EOQ = Square root ((2AXO)/C)) | ||
| EOQ =Square root ((2*40700*185)/1.10)= 3700 Yards |
| Computation of No. of Order | ||
| Annual Demand/ EOQ=No. of Order | ||
| 40700/3700=11 Order |
| Computation of Reorder Point |
| Yards Use per Week= Annual Demand / No. of Week |
| =40700/44=925 Yard/ Week |
| Purchaing Lead Time:=2 Week |
| Yard used per week |
| Quantity Required : 925X2=1850 Yards |
| Hence Rorder Point : 1850 Yards |
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