Explore BrainMass

Explore BrainMass

    Clothes, Inc., has an average annual demand

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Clothes, Inc., has an average annual demand for red, medium polo shirts of 25,000 units. The
    cost of placing an order is $80 and the cost of carrying one unit in inventory for one year is $25.

    Required:
    a. Use the economic-order-quantity model to determine the optimal order size.
    b. Determine the reorder point assuming a lead time of 10 days and a work year of 250 days.
    c. Determine the safety stock required to prevent stockouts assuming the maximum lead time is 20 days and the maximum daily demand is 125 units.

    © BrainMass Inc. brainmass.com March 4, 2021, 8:18 pm ad1c9bdddf
    https://brainmass.com/business/strategy-and-business-analysis/clothes-inc-average-annual-demand-159117

    Solution Preview

    D= 25,000
    H = $25 per unit
    C= $80 per order

    a. EOQ = SQRT (2 X D X C / H)

    =SQRT (25,000 X 2 X 80 / 25)

    = 400 Units

    b. ...

    Solution Summary

    The expert examines Clothes, Inc. average annual demand.

    $2.49

    ADVERTISEMENT