Question
Jameson Electronics is forecasting next year's optimal order size. In 2020, annual sales are 30000 units, with a carrying cost of $150 per unit and
Jameson Electronics is forecasting next year's optimal order size. In 2020, annual sales are 30000 units, with a carrying cost of $150 per unit and ordering costs of $50.
a. Calculate the EOQ (Economic Order Quantity)
b. If it takes 4 days to receive an order from suppliers, at what inventory level should another order be placed? Assume that Jameson Electronics uses 30000 units every 60 days. c. Calculate the total ordering cost
d. Now assume that carrying cost is expected to increase by 10% in 2021 due to increase in rentals of warehouse space. Determine the effect on EOQ.
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