The annual holding cost for each airplane the cost

lOMoARcPSD|24389855

Using the continuous review system, what is the economic order quantity (EOQ. that Jon should use as the order quantity for this item? Select the closest number.

Group of answer choices





EXPLANATION

Gather data.

D = Annual Demand
D = Demand per week × # of weeks operating in a year D = 50 × 52
D = 2,600

S = Order Cost (Cost per order is already given) S = $30

2 × 𝐷 × 𝑆
𝐸𝑂𝑄 = �
𝐻

�	2 × 2600 × 30
𝐸𝑂𝑄 =	10

𝐸𝑂𝑄 = �		156000
𝐸𝑂𝑄 = �		10

Downloaded by bfg gdfg (ANNA44566585@outlook.com)

lOMoARcPSD|24389855




	10,407 airplanes
	207 airplanes

Now, calculate the Reorder Point.
Reorder Point = D × T + Safety Stock
Reorder Point = (50 × 4) + 7
Reorder Point = 200 + 7
Reorder Point = 207

Answer: Option 4 - 207 airplanes