A Company Uses 2,750 Per Year of a Certain Subassembly

Essay

A company uses 2,750 per year of a certain subassembly that has a purchase cost of $450, and an annual holding cost of $500 per unit.Each order placed costs $150.The company operates 300 days per year and it has found that an order must be placed with the supplier 12 working days before it can expect to receive that order.For this subassembly, find:
(a)the economic order quantity.
(b)the reorder point.