Q. Cress Electronic Products manufactures components utilized in the automotive organization. Cress purchases parts for us in its manufacturing operation from a variety of different suppliers. One particular provider supplies a part where the assumptions of the EOQ model are realistic. The annual demand is 5000 units, the ordering cost is $80 every order also the annual holding cost rate is 25%.

a) If the cost of the parts is $20 every unit, Illustrate what is the economic order quantity?

b) Assume 250 days of operation every year. If the lead time for the order is 12 days, illustrate what is the reorder point?

c) If the lead time for the parts is 7 weeks (35 days), illustrate what is the reorder point?

d) Illustrate what is the reorder point for part C if the reorder point is expressed in terms of the inventory on hand rather than the inventory position?