Harrowing Company Has the Following Information

question 30

Essay

Harrowing Company has the following information:
Annual demand 3,500 units
Order size 500 units
Ordering cost per order $400
Carrying costs per unit for one year $40 Lead time (maximum 20 days) 10 days
Maximum daily use 25 units
Work year 250 days
Required:
a. Determine the economic order quantity for Harrowing.
b. What is the annual savings to Harrowing Company if it was 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:

Carbon Dioxide

An invisible and scentless gas generated from the combustion of carbon-based substances and organic compounds, as well as from breathing processes, that is taken in by plants for photosynthesis.

Lactate

A byproduct of anaerobic metabolism, commonly produced in muscles during intense exercise, and used as an energy source.

Concentric Contractions

A type of muscle contraction in which the muscle shortens while generating force.

Muscle Tension

The force generated by the contraction of muscle fibers, often in response to external stimuli or neural activation.