Answered step by step
Verified Expert Solution
Question
1 Approved Answer
82%(4) Sun & AutoSave OFF svo w Excersice 11 Insert Draw Design Layout References Mailings Review Tell me Share Calibri (Bo... 11 ' ' Aav
82%(4) Sun & AutoSave OFF svo w Excersice 11 Insert Draw Design Layout References Mailings Review Tell me Share Calibri (Bo... 11 ' ' Aav to B I U v ab x x A . Styles V Dictate V nav || Problem 1.2. Arirang Company plans to sell 200,000 widgets during the year. The firm orders 10 times a year for the equal units of the quantity. The cost of carrying one widget in inventory is $0.20 per year and the cost of placing one purchase order is $80. (Use two digits after the decimal point). 1). What is the current average inventory level for Arirang Company? 100,000 units Show work here. (Remember I lectured the average inventory is divided by the quantity ordered divided by 2). 200,000/2= 100,000 units 2). What is the current total carrying cost for Arirang? $4,000 Show work here. Step 1: Find EOQ EOQ=Square root (2 *200,000*80/220) = 4,000 Step 2: plug into carrying cost equation (Q/2 * C) 4000/2*.20= 2000 2000*10= 4,000 3). What is the current total ordering cost of Arirang Company? $4,000 Show work here. Plug EOQ into ordering cost equation (D/Q*o) 200,000/4000*80=4,000 4). What is the current total cost for carrying and ordering for Arirang? $8,000 4,000 + 4,000 5). Is Arirang Company efficient in the supply chain management? Yes or No. Explain why. (Hints: You must compute the following a and b to answer) a. Compute EOQ where Total Carrying cost is equal to Total Ordering cost. b. Compare your EOQ with 10,000 units they are currently ordering each time to say yes or no. 6). Fill in the following table using the information used for the current situation and the information
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