Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
1. The John Equipment Company estimates its carrying cost at 15% and its ordering costat $9 per order. The estimated annual requirement is 48,000 units
1. The John Equipment Company estimates its carrying cost at 15% and its ordering costat $9 per order. The estimated annual requirement is 48,000 units at a price of $4 per unit. Required: (a) What is the most economical number of units to order? (b) How many orders should be placed in a year? 2. A manufacturing company places a semi-annual order of 24,000 units at a price of $20 per unit. Its carrying cost is 15% and the order cost is $12 per order. Required: (a) What is the most economical order quantity? (b) How many orders need to be placed? 3. The annual demand for an item is 12,000 units. The order cost is $1,000 and the cost of holding one unit of stock is $20. Calculate the EOQ. 4. A firm's annual demand for an item of stock is 24,000 units. It incurs a cost of $50 to hold one unit of the stock for the year and the delivery cost of the stock is $2,000. What would be the economic order quantity? 5. Calculate Economic Order Quantity (EOQ) from the following: Annual consumption - 6,000 units Cost of ordering - $60 Carrying costs - $2
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started