Question
Consider a basic economic order quantity (EOQ) model with the following characteristics: Item cost: $15 Item selling price: $20 Monthly demand: 500 units (constant) Annual
Consider a basic economic order quantity (EOQ) model with the following characteristics: Item cost: $15 Item selling price: $20 Monthly demand: 500 units (constant) Annual holding cost: $1.35 per unit Cost per order: $18 Order lead time: 5 working days Firm's work year: 300 days (50 weeks @ 6 days per week) Safety stock: 15% of monthly demand For this problem, determine the values of:
1/Q* the optimal order quantity and reorder point. Select one: a. 500 and 175 b. 400 and 175 c. none of the other d. 400 and 100 e. 400 and 75
2/M, the maximum quantity in inventory. Select one: a. None of the other b. 475 c. 500 d. 675 e. 575
3/T, the cycle time in working days. Select one: a. 25 b. 32 c. 20 d. 15 e. None of the other
4/Total annual inventory cost. Select one: a. None of the other b. $540.00 c. $90,641.25 d. $675.00 e. $90,540.00
5/What is the annual ordering cost? Select one: a. $216.00 b. $18.00 c. $270.00 d. None of the other. e. $1,080.00
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