Answer Happy

PIOLO, Inc. operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now considering inventory decisions for its Los Ashkals football jerseys product line. This is a highly popular item. Data for 2020 are as follows: Expected annual demand for Ashkals jerseys 7,350 Ordering cost per purchase order P200 Carrying cost per year P6 per jersey Each jersey costs PIOLO P40 and sells for P80. The P6 carrying cost per jersey per year comprises the required return on investment of P4.80 (12% of P40 purchase price) plus P1.20 in relevant insurance, handling, and theft-related costs. The average purchasing lead time is 7 days. PIOLO is open 365 days a year. Required: a. Calculate the EOQ b. Calculate the number of orders that will be placed each year. C. Calculate the total carrying cost d. Calculate the ordering cost per year. e. Calculate the reorder point. f. As stated, the average purchasing lead time is 7 days. Assume that there are times when this lead time reaches a maximum of 10 days. How many units of safety stock must the company have, and (7) what should be the reorder point? Round up your answer to the nearest whole number.