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Unformatted text preview: Mgmt 361  Homework 4 *Even though the EOQ model allows for rounding of ±5%, the purposes of this homework please keep the rounding to a minimum & only use numbers that are increments of 5. Question 1 A local jacket distributor expects to sell 9,000 fleece, black, size large jackets. Assume that EOQ model assumptions are valid. Each jacket costs $50, ordering cost is $100 per order, and carrying cost is 1 dollar per unit per month. Assume that the distributor operates 300 days a year. a) What is the annual inventory cost if 500 units are ordered at a time? b) What is the “optimal” calculated lot size? c) If the order lot size must be a multiple of 25, what is the “optimal” lot size? d) Given that the order lost size must be a multiple of 25, what is the annual inventory cost? e) Given your answer in 1d, what is the order policy, (if the delivery leadtime is 0 days)? f) When placing an order, how much on hand inventory would you have if the lead time was 20 days?...
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 Spring '10
 panwalker
 Management, Harshad number, $3, $50, annual inventory cost

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