Calculate EQQ
Average Inventory Inventory
Number of orders per year
Daye. between orders per. year holding costs per year
Lead time and reorder point
Food Lion’s grocery store is doing an inventory analysis for a popular cereal which has a demand of 20,000 units per year. The cost of each box of cereal is $ 3.20, and the inventory carrying cost is $0.68 per unit per year. The average ordering cost is $22 per order. It takes about 3 days for an order to arrive. The store is open 365 days per year.
Lead time for one of your fastest-moving products is 24 days. Demand during this period averages 2100 units for a seven day week.
What is the EOQ?
What is the average inventory?
What is the optimal number of orders per year.
What is the optimal number of days between orders.
What is the ordering and holding cost per year?
What is the total inventory cost including the cost of the $20,000 units per year?
What would be an appropriate reorder point?
How would your answer change if lead time drops in half, but the demand stays the same?
Calculate EQQ Average Inventory Inventory Number of orders per year Daye. betwee
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