Harrisburg Company Uses Quantitative Models for Inventory Control

question 88

Essay

Harrisburg Company uses quantitative models for inventory control. For canned syrup, the annual demand is 9,000 cases. The supplier is 500 miles away, and it usually takes 4 days to get an order filled. The average order costs
$18 to process and the carrying cost per case is $42 per year. The store is open 300 days a year.
Required:
a. Determine the economic order quantity.
b. Determine the reorder point if a safety stock of 24 cases is desired.

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