Question: Westside Auto purchases a component used in the manufacture of automobile generators directly from the supplier. Westside’s generator production operation, which is operated at a constant rate, will require 1000 components per month throughout the year. (12,000 units annually). Assume that the ordering cost are $25.00 per order, the unit cost is $2.50 per component, and the holding costs are 20% of the value of the inventory. Westside has 250 working days per year and a lead time of 5 days. Answer the following questions:

1. What is the EOQ for this component?
2. What is the reorder point?
3. What is the cycle time?
4. What are the total annual holding and ordering costs associated with your recommended EOQ?

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Solution: The downloadable solution consists of 2 pages
Deliverable: Word Document