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EOQ Model

Demand for a popular athletic shoe is nearly constant at 800 pairs per week for a regional
division of a national retailer. The cost per pair is $54. It costs $72 to place an order, and annual
holding costs are charged at 22% of the cost per unit. The lead time is two weeks.

a. What is the EOQ?
b. What is the reorder point?
c. What is the cycle time?
d. What is the total annual cost?

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Solution Summary

Solution contains calculations of EOQ, reorder point , cycle time and annual cost.