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6.108    East Valve Distributors distributes industrial valves and control devices.  The Eastern control device has an annual demand of 9,375 units and sells for $100 per unit.  The cost of ordering is $40 per order and the average carrying cost per unit per year is $0.75.  Determine the economic order quantity.

6.109    East Valve Distributors distributes industrial valves and control devices.  The Eastern valve has an annual demand of 10,000 units and a cost of $80 per unit.  The cost of ordering is $72 per order and inventory carrying cost is estimated to be 5 percent of the cost of each valve.  Lead time is four working days.  Determine (assume 250 working days):

            (a)  the economic order quantity
(b)  the reorder point
(c)  the optimal number of orders per year
(d)  the optimal number of working days between any two orders

6.108 ANSWER:
(a) EOQ = 600 units (b) ROP = 40(4) = 160 units, (c) number of orders per year = D/Q = 10,000/600 = 16.67 orders
(d) number of days between orders = 250/16.67 = 15 days

 6.109 ANSWER: EOQ = 1,000 units