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Wonder Line WL operates a megastore featuring sports merchandise It uses an EOQ decision model to make inventory decisions It is now considering inventory decisions for its Los Angeles Galaxy

Wonder Line (WL) operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now considering inventory decisions for its Los Angeles Galaxy soccer jerseys product line. This is a highly popular item. Data for 2017 are as follows: Expected annual demand for Galaxy jerseys ....................... 9,000 Ordering cost per purchase order .................................... $250 Carrying cost per year ................................................. $8 per jersey Each jersey costs WL $50 and sells for $100. The $8 carrying cost per jersey per year consists of the required return on investment of $5.00 (10% × $50 purchase price) plus $3.00 in relevant insurance, handling, and storage costs. The purchasing lead time is 5 days. WL is open 365 days a year. Required: 1. Calculate the EOQ. 2. Calculate the number of orders that will be placed each year. 3. Calculate the reorder point.

Apr 06 2020 Read more Less More

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