Answer:
EOQ = 2,000
Time between order = 10 days
Setup and Ordering Cost $450
ATTACHED GRAPH
Explanation:
[tex]Q_{opt} = \sqrt{\frac{2DS}{H}}[/tex]
Where:
D = annual demand = 36,000
S= setup cost = ordering cost = 25
H= Holding Cost = 0.45
[tex]Q_{opt} = \sqrt{\frac{2(36,000)(25)}{0.45}}[/tex]
EOQ = 2,000
2,000 / 300 unit per day = 6.67
Setup cost:
36,000 units / 2,000 per batch x $25 cost per batch = $ 450
Holding cost:
2,000 units / 2 x $0.45 per unit = $ 450
36,000 units / 360 days = 100 units per day
2,000 units / 100 unit = 20 days
IMPORTANT DISCLAMER
As we are given with no safety stock we assume is zero
If there was any, then we should draw a line at this stock and move the graph upwards.
