What is the eoq for the component

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Reference no: EM134007944

Problem

Westside Auto purchases a component used in the manufacture of automobile generators directly from the supplier. Westside's generator production operation, which is operated at a constant rate, will require 1,000 components per month throughout the year (12,000 units annually). Assume that the ordering costs are $28 per order, the unit cost is $2.70 per component, and annual holding costs are 25% of the value of the inventory. Westside has 250 working days per year and a lead time of 5 days.

I. What is the EOQ for this component?
II. What is the reorder point?
III. What is the cycle time (in days)? Get the instant assignment help.
IV. What is the total annual holding cost (in $) associated with your recommended EOQ?

Reference no: EM134007944

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