Question
6.10 A computer equipment has 4 outlets. Currently each outlet manages its ordering independently. Demand at each outlet averages 4,000 units per week. Each unit
6.10 A computer equipment has 4 outlets. Currently each outlet manages its ordering independently. Demand at each outlet averages 4,000 units per week. Each unit costs $200, and the company has holding cost of 20% per annum. The fixed cost of each order (administration plus transportation) is $900. Assume 50 weeks in a year.
a) What is the annual demand at each outlets (Units/Year)?
b) What is the annual unit holding cost for a single outlet ($/unit/year)?
c) What is the quantity that would minimize annual inventory cost for each outlet ?
d) Using The EOQ, what is the average inventory the company holds across all 4 outlets (units)?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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