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    Reorder Point

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    East value Distributors distributes industrial valves and control devices. The Eastern Valve Co. Has an annual demand of 20000 units and cost of $90 per unit. The cost of ordering is $100 per order and inventory-carrying cost is estimated to be 5 percent of the cost of each value. Lead-time is four working days. Determine(assuming 250 working days): The economic order quantity, the reorder point, the optimal number of orders per year, the optimal number of days between any two orders.

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    Solution Preview

    In this case, we have:
    <br>D= annual demand=20000
    <br>UC=Unit cost = 90
    <br>OC=the cost of ordering=100
    <br>IC= inventory-carrying cost=5%
    <br>L= ...

    Solution Summary

    The solution discusses East Value Distributors distributes industrial valves and control devices. The Eastern Valve Co. Has an annual demand of 20000 units and cost of $90 per unit. The cost of ordering is $100 per order and inventory-carrying cost is estimated to be 5 percent of the cost of each value. Lead-time is four working days. Determine(assuming 250 working days): The economic order quantity, the reorder point, the optimal number of orders per year, the optimal number of days between any two orders.

    $2.19

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