Question
Evans Company has the following information: Annual demand -----------------------------------------4,000 units Current order size---------------------------------------1,000 units Ordering cost per order--------------------------------$100 Carrying cost per unit for one year
Evans Company has the following information:
Annual demand -----------------------------------------4,000 units
Current order size---------------------------------------1,000 units
Ordering cost per order--------------------------------$100
Carrying cost per unit for one year --------------- $5
Lead time (Max 15 days)----------------------------- 10 days
Working year --------------------------------------------- 250 days
Question 1: the economic order quantity (EOQ) for Evans company is ?
Question 2: what total amount of safety stock should Evans company hold to prevent stockouts due to uncertainty in demand and delivery?
Question3 : Evans company is currently using an order size of 1,000 units. what is the annual saving to Evans company if they were to change from an order size of 1000 to teh economic order quantity?
ps: I need the " process" to answer each question
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