Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Annual Sales is 300,000 units. The carrying cost is 20% of the purchase price; The purchase price is RM25 per unit; The ordering cost is
Annual Sales is 300,000 units. The carrying cost is 20% of the purchase price; The purchase price is RM25 per unit; The ordering cost is RM1,500 per order; The desired safety stock level 8,000 units; The delivery time is 1 week (7days). g) What would happen to the EOQ if annual sales doubled (all other unit costs and safety stocks remain constant)? What is the elasticity of EOQ with respect to sales? (That is, the percentage change in EOQ divided by the percentage change in sales). h) If carrying costs double, what will happen to the EOQ level? (Assume the original sales level of 300,000 units). What is the elasticity of EOQ with respect to carrying costs? (That is, the percentage change in EOQ divided by the percentage change in carrying costs)
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