Winter Resort Solutions sells ski and snowboard equipment.The company also manufactures snowboards.Winter Resort Solutions orders 6,000 snowboards a year,115 per week,at $24.50 per board and it covers all shipping costs.The company earns 30% on its cash investments.The purchase-order lead time is 2.5 weeks.It sells 125 snowboards per week.The following data are available:

Compute the economic order quantity for Platinum Snow Company and the reorder point.

Question

Winter Resort Solutions sells ski and snowboard equipment.The company also manufactures snowboards.Winter Resort Solutions orders 6,000 snowboards a year,115 per week,at $24.50 per board and it covers all shipping costs.The company earns 30% on its cash investments.The purchase-order lead time is 2.5 weeks.It sells 125 snowboards per week.The following data are available:

Compute the economic order quantity for Platinum Snow Company and the reorder point.

Quizplus · Accepted Answer

B)EOQ = The square root of [(2 × 6,000 ×$21.25)/ ($24.50 × 30%)+ $2.50)]
EOQ = 150 snowboards 254800 / 254.037 15.93
Reorder point = [(125 snowboards × 2.5 weeks)] = 312.5,or 313 snowboards

Winter Resort Solutions Sells Ski and Snowboard Equipment