Question
CDX Corp has an annual demand of 150,000 units, a setup cost of $75 per order, and an annual holding cost per unit of $3.25.
CDX Corp has an annual demand of 150,000 units, a setup cost of $75 per order, and an annual holding cost per unit of $3.25.
A) If the company currently purchases 12,500 units every time it places an order, what is the current total setup cost per year?
B) If the company currently purchases 12,500 units every time it places an order, what is the current holding cost per year?
C) If the company currently purchases 12,500 units every time it places an order, what is the current total inventory management cost per year?
D) If the company were to use EOQ, what would be the ideal quantity it should purchase each time (round up to a whole number)?
E) If the company were to use EOQ, what would be the associated annual setup cost? For this question, roundup your EOQ to the next whole number.
F) If the company were to use EOQ, what would be the associated annual holding cost?
G) If the company were to use EOQ, what would be the associated total annual inventory management cost?
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