2.

Southeastern Bell stocks a certain switch connector at its central warehouse for supplying field
service offices. The yearly demand for these connectors is 15,000 units. Southeastern estimates its
annual holding cost for this item to be $25 per unit. The cost to place and process an order from the
supplier is $75. The company operates 300 days per year, and the lead time to receive an order from
the supplier is 2 working days.

a) Find the economic order quantity.

b) Find the annual holding costs.
c) Find the annual ordering costs.
d) What is the reorder point?

Diketahui:
Annual Demand= 15,000 units
Ordering Cost = $75
Carrying Cost =$25

Dijawab
2 × Annual Demand ×Ordering Cost
a) EOQ =
√ Carrying Cost

2 ×15,000 ×75 2,250,000

=
√ 25
=
√
25
= √ 90,000 = 300 Unit

Annual Demand 15,000

 Numbers of Orders = ¿ = 50 Orders
EOQ 300

EOQ
 Average Inventory =
2
300
= = 150 Units
2

b) Annual Holding Cost = Average Inventory × Holding Cost Per Unit =

150 Unit × $ 25 = $ 3,750
c) Annual Ordering Cost = Numbers of Orders ×Ordering Cost
= 50 Orders× $ 75=$ 3750
d) Reorder Point = Average Daily Demand × Lead Time
Annual Demand
= × Lead Time
Number of Days

15,000Unit
= ×2 Working Days
300 Days

= 50 ×2=100Units