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Cress Electronic products manufactures compnents used in the automotive indusry. Cress purches parts for use in its manufactoing operations from a variety of suppliers. One supplier provides a part where the assumptions of the EOQ model are realistic. The annual demand is 5000 units , the ordering costs are 80 per order and the annual holding cost rate is 25%
A. If the cost or part is $20 per unit what is the economic order quantity?
B. Assume 250 days of operation per year. If the lead time for an order is 12 days, what is the reorder point?
C. If the lead time for the parts is seven weeks, (35 days) what is the reorder point?

Operation Management, Management Studies

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