Katoomba Horticulture Company Has Been Ordering 150 Units of Liquifeed

Essay

Katoomba Horticulture Company has been ordering 150 units of Liquifeed on the recommendation of the salesperson who calls on the company each month.A new purchasing agent has been hired by the company who wants to start using the economic-order-quantity (EOQ)method and its supporting decision elements.She has gathered the following information:
$$\begin{array} { | l | l | } \hline \text { Annual demand in units } & 350 \\\hline \text { Days used per year } & 365 \\\hline \text { Lead time, in days } & 12 \\\hline \text { Ordering costs } & \$ 110 \\\hline \text { Annual unit carrying costs } & \$ 25 \\\hline\end{array}$$
Required:
Determine the EOQ,average inventory,orders per year,average daily demand,reorder point,annual ordering costs and annual carrying costs.
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