Question
A Company has been ordering 275 units based on the recommendation of the salesperson that calls the company monthly. Henia has been hired by the
A Company has been ordering 275 units based on the recommendation of the salesperson that calls the company monthly. Henia has been hired by the Company and wants to start using the Economic Order Quantity method and its supporting decision elements. She has gathered the following information: Annual demand in units 1500 Usage 900 - 1500 Days used per year 250 Lead time in days 4 - 6 Ordering costs $600 Carrying costs $120 Calculate: a. The EOQ. b. Re-order point. c. The safety stock level. d. Maximum stock level. e. The current annual ordering costs. Assessment II Management Accounting 24 June 2021 f. The current annual carrying costs. g. The current annual stock administration cost. h. The annual carrying cost at EOQ. i. The annual ordering cost at EOQ.
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