Party Industry buys Halloween blowups from it key vendor Airproducts. Demand for Large Pumpkins is 16,000 per year. The cost to buy the Pumpkins is $100 per and the annual holding cost per unit is 2.5% of the cost. The cost to place an order with Airproducts is $50 regardless of the size. Lead-time from the vendor is consistent at 10 days and the standard deviation of daily demand equals 46 units.
A. Calculate the Economic Order Quantity (EOQ) for Large Pumpkins
B. Calculate the ROP with safety stock for Large Pumpkins
Categories: