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Q is……monthly demand : 7500 units
unit cost :$5
ordering cost :$100 per order
holding cost :$0.5
req:
if they order the EOQ each time at what level of inventory should a new order be placed?
I can’t gt’t the concept what is actually tryin to want? answer in MCQ REVISION IS
ANS:7397 UNITS…You have not typed the full question.
If they want to know at what level of inventory a new order is placed, then the question must have given the lead time (the time between placing an order and receiving the delivery) because you need to place an order when you have enough left in inventory to keep going until the delivery arrives.
The question actually says that the lead time is 30 days. So assuming 365 days in a year, they need to reorder when they have 30 x (12 x 7,500)/365 = 7,397 units left in inventory.
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