A television manufacturer requires 25000 pieces of wire (each 2 cm long) every month for assembly. Ordering cost per order is Rs. 5000 and carrying (or holding) cost is 35 percent of the unit price. The price per unit of a piece is Rs. 15. Assuming delivery is instantaneous, find the economic order quantity (EOQ) and the reorder point.
To find the Economic Order Quantity (EOQ) and reorder point for the television manufacturer's wire inventory, we'll use the EOQ formula and the reorder point formula.
1. Economic Order Quantity (EOQ):
EOQ = √[(2 * D * S) / H]
Where:
D = Demand per period (monthly demand) = 25,000 pieces
S = Ordering cost per order = Rs. 5000
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