Evans Company Has the Following Information ADetermine the Economic Order Quantity for Evans

question 62

Essay

Evans Company has the following information:
$\begin{array}{ll}\text { Annual demand } & 4,000 \text { units } \\\text { Order size } & 1,000 \text { units } \\\text { Ordering cost per order } & \$ 500 \\\text { Carrying costs per unit for one year } & \$ 50 \\\text { Lead time (maximum 20 days) } & 10 \text { days } \\\text { Maximum daily use } & 25 \text { units } \\\text { Work year } & 250 \text { days }\end{array}$
a.Determine the economic order quantity for Evans.
b.What is the annual savings to Evans Company if it is to change from an order size of 1,000 to the economic order quantity?
c.What is the reorder point?
d.What is the safety stock needed to prevent stockouts?

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Definitions:

Royal Navy

The naval warfare service branch of the United Kingdom, known for its historic role in British colonialism and major global conflicts.

Fundamental Constitutions

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Feudal Society

A societal structure in medieval Europe characterized by the hierarchy of lordship tied to land ownership, with lords offering protection in exchange for service.

Church of England

The primary state church in England, established in the 16th century by King Henry VIII, known for its Anglican doctrine and practices.