Harrowing Company has the following information: Annual demand =3,500 units Order size = 500 units Ordering cost per order =$400 Carryingcosts per unit for one year =$40 Lead time (maximum 20 days)=10days Maximumd use =25 units Work year =250days Required: a.Determine the economic order quantity for Harrowing b. Determine the reorder point. c. What is the safety stock needed to prevent stockouts?
Harrowing Company has the following information: Annual demand =3,500 units Order size = 500 units Ordering cost per order =$400 Carryingcosts per unit for one year =$40 Lead time (maximum 20 days)=10days Maximumd use =25 units Work year =250days Required: a.Determine the economic order quantity for Harrowing b. Determine the reorder point. c. What is the safety stock needed to prevent stockouts?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Harrowing Company has the following information:
Annual demand =3,500 units
Order size = 500 units
Ordering cost per order =$400
Carryingcosts per unit for one year =$40
Lead time (maximum 20 days)=10days
Maximumd use =25 units
Work year =250days
Required:
a.Determine the economic order quantity for Harrowing
b. Determine the reorder point.
c. What is the safety stock needed to prevent stockouts?
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