Q.2(a) Discount Carpets manufactures Cascade carpet, which it sells in the adjoining showroom.

Estimated annual deman

operates for 360 days and produces 400 yards of carpet per day. The cost of setting up the manufacturing process f
receive an order and maximum inventory level.

Annual Demand, D= 20,000 yards

Carrying Cost (in $), Cc= 2.75 per yard
Operational Days 360 days
Output 400 yards per day
Cost of setting up (in $), Co= 720

Optimal Order Size, EOQ=

√2*D*Co/Cc= 3,236.1593 yards

Annual Holding Cost= Q/2*Cc 4,449.72

Annual Ordering Cost= D/Q*Co 4,449.72
Total Inventory Cost= 8,899.44

Length of Time to receive an order = Time Between Orders for EOQ= EOQ/D=
m. Estimated annual demand is 20,000 yards of carpet with an annual carrying cost of $ 2.75 per yard. The manufacturing facility
the manufacturing process for a production run is $ 720. Determine the optimal order size, total inventory cost, length of time to

0.161808 years
58.250868 days
 cturing facility
ngth of time to