Statistics Homework Solutions
Problem
#5224

Determining the reorder point and the optimal number of orders and days in a distribution company using the given scenario.

East value Distributors distributes industrial valves and control devices.  The Eastern Valve Co.  Has an annual demand of 20000 units and cost of $90 per unit.  The cost of ordering is $100 per order and inventory-carrying cost is estimated to be 5 percent of the cost of each value.  Lead-time is four working days.  Determine(assuming 250 working days):  The economic order quantity, the reorder point, the optimal number of orders per year, the optimal number of days between any two orders.

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