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Dennis Sport World, a chain of sporting goods stores, sells 360,000 tennis balls per year. The tennis balls cost Dennis Sport World RM15 per dozen. Annual inventory carrying costs are 20 percent of inventory price. The cost of placing and receiving an order are RM72. Assume the inventory replenishment occurs virtually instantaneously. Based on recent experience, Dennis Sport World uses 7 days delivery time for planning purposes. (Assume 360 days in a year) TASKS a) Calculate the Economic Order Quantity. b) Calculate the number of orders to be placed. c) Calculate the total annual inventory costs. d) Determine the reorder point.

Dennis Sport World, a chain of sporting goods stores, sells 360,000 tennis balls per year. The tennis balls cost Dennis Sport World RM15 per dozen. Annual inventory carrying costs are 20 percent of inventory price. The cost of placing and receiving an order are RM72. Assume the inventory replenishment occurs virtually instantaneously. Based on recent experience, Dennis Sport World uses 7 days delivery time for planning purposes. (Assume 360 days in a year) TASKS a) Calculate the Economic Order Quantity. b) Calculate the number of orders to be placed. c) Calculate the total annual inventory costs. d) Determine the reorder point.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Dennis Sport World, a chain of sporting goods stores, sells 360,000 tennis balls per year. The tennis balls cost Dennis Sport World RM15 per dozen. Annual inventory carrying costs are 20 percent of inventory price. The cost of placing and receiving an order are RM72. Assume the inventory replenishment occurs virtually instantaneously. Based on recent experience, Dennis Sport World uses 7 days delivery time for planning purposes. (Assume 360 days in a year) TASKS a) Calculate the Economic Order Quantity. b) Calculate the number of orders to be placed. c) Calculate the total annual inventory costs. d) Determine the reorder point.
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