Eoq questions

1. Q1
•Annual Demand = 1,000 units
•Days per year considered in average daily demand =
365
•Cost to place an order = $10
•Holding cost per unit per year = $2.50
•Lead time = 7 days
•Cost per unit = $15
Determine the economic order quantity and the reorder point.

2. Q2
•Alocaldistributorfornationaltirecompany
expectstosellapproximately9,600steel–
beltedradialtiresofacertainsizeandtread
designnextyear.Annualcarryingcostsare$16
pertire,andorderingcostsare$75.The
distributoroperates288daysayear.
1.WhatistheEOQ?
2.Howmanytimesperyeardoesthestore
reorder?

3. Q3
•A firm manufactures products in job lots and this year
expects to sell 10,000 units of its 27-gallon cooler. The
unit manufacturing cost of the cooler is $10. Setup costs
of $625 include labour for making machine settings,
installing the new dies, and other costs of setting up the
production run of the coolers. The cost of storing and
handling units is estimated at 20 percent of production
cost. Compute the optimum production run.