The Cloth Center, Inc. buys and sells fabrics to a wide range of industrial and...
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The Cloth Center, Inc. buys and sells fabrics to a wide range of industrial and consumer users. One of the product it carries is denim cloth, used in the manufacture of jeans and carrying bags. the supplier for the denim cloth pays all incoming freight. No incoming inspection of the denim is necessary because the supplier has a track record of delivering high-quality merchandise. the purchasing officer of the Cloth Center, Inc. has collected the following information:
Annual demand for denim cloth 20,000 yards
Ordering costs per purchase order P160
Carrying costs per year 205 of purchase costs
Safety stock requirements None
Cost of denim cloth P8 per year
The purchasing lead time is 2 weeks. The Cloth Center is open 250 days a year (50 weeks for 5 days a week)
REQUIRED:
a. What is the EOQ for denim cloth?
b. what is the number of orders that will be placed each year?
c. , what is the reorder point for denim cloth?
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