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Given the following information for an important purchased part, compute the
(a) EOQ
(b) Total purchase cost
(c) Annual holding cost
(d) Annual order cost
(e) Annual total cost
(f) Reorder point
(g) Number of orders placed per year
(h) Time between orders.
Use Microsoft Excel to plot the cost curves (annual holding cost, annual order cost and annual total cost) on the vertical axis, and the order quantity on the horizontal axis.
Monthly demand = 3,500 units
Order cost (S) = $250 per order
Holding cost (kC) = $8.65 per unit per year
Unit cost (C) = $85 per unit
Lead time (LT) = 12 days
Number of days per year = 365 days
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