Antonio White's machine shop uses 3,500 brackets during the course of a year. These brackets are purchased from a supplier 80 miles away. The following information is known about the brackets:
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Annual demand:
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3,500
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Holding cost per bracket per year:
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$1.45
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Order cost per order:
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$15.50
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Lead time:
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2 days
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Working days per year
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260
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- Given the above information, what would be the economic order quantity (EOQ)?
- Given the EOQ, what would be the average inventory? What would be the annual inventory holding cost?
- Given the EOQ, how many orders would be made each year? What would be the annual order cost?
- Given the EOQ, what is the total annual cost of managing the inventory?
- What is the time between orders?
- What is the reorder point (ROP)?