Sells 360,000 tennis balls per year. The tennis balls cost Dennis Sport World RM15 per dozen. Annual inventory carrying costs are 20% of inventory price. The cost of placing and receiving an order are RM72. Assuming 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) a) Calculation of the Economic Order Quantity? b) Calculation of the number of orders to be placed? c) Calculation of the total annual inventory costs?

Practical Management Science
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ISBN:9781337406659
Author:WINSTON, Wayne L.
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Chapter2: Introduction To Spreadsheet Modeling
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Sells 360,000 tennis balls per year. The tennis balls cost Dennis Sport World RM15 per dozen. Annual inventory carrying costs are 20% of inventory price. The cost of placing and receiving an order are RM72. Assuming 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) a) Calculation of the Economic Order Quantity? b) Calculation of the number of orders to be placed? c) Calculation of the total annual inventory costs? d) Determination of the reorder point?
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d) Determination of the reorder point?

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