Question
A local computer shop decided to use the EOQ model to formulate an inventory management system for their monitors. The monitors are demanded 52 weeks
A local computer shop decided to use the EOQ model to formulate an inventory management system for their monitors. The monitors are demanded 52 weeks a year, below are more information that you will need:
| Item cost | $ | 150.00 |
| Order cost | $ | 120.00 |
| Annual holding cost (%) | â?¯ | 30 % of item cost |
| Annual demand | â?¯ | 780 |
| Average weekly demand | â?¯ | 15 per week |
| Standard deviation of weekly demand | 3 per week | |
| Lead time | 3 weeks | |
| Service probability | 95 % |
Determine the order quantity and reorder point (round to the nearest whole number
Optimal order quantity =
Reorder point =
Determine the annual holding and order costs (round to 2 decimal places
Annual Holding Cost =
Annual Ordering Cost =
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To determine the order quantity and reorder point using the Economic Order Quantity EOQ model as wel...
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
Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
