The new toilet has been test-marketed successfully and Home Depot estimated that sales would average...

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Finance

The new toilet has been test-marketed successfully and Home Depot estimated that sales would average 1,000 units per year. It would cost $100 to keep a unit in inventory for a year, and the fixed reordering cost would be $80. Home Depots cost would be $500 per unit. The following table shows the expected stockout costs

Help, please! I solve the first question but I am not confident in my answer.

What is Home Depots EOQ for the deluxe toilet units? Using the EOQ, what is the average inventory, number of orders per year, and the total annual cost of maintaining the inventory of deluxe toilet units?

The average lead-time demand is 10 units. The exhibit below shows how the expected annual stockout cost depends on the amount of safety stock. What is the optimal safety stock and reorder point? (Hint: Calculate the remaining three columns in the table to determine the least expensive alternative.) SAFETY STOCKS AND EXPECTED STOCKOUT COSTS

Reorder

Safety

Expected

Stockout

Reorder

Carrying

Ordering

Total

Point

Stock

Costs

Point

Cost

Cost

Cost

10

0

$350

20

12

2

290

22

14

4

255

24

16

6

225

26

18

8

210

28

20

10

200

30

22

12

192

32

24

14

186

34

26

16

182

36

28

18

180

38

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