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Lawn World Company, which produces lawn mowers, purchases 10,000 units of a rotor blade part each year at a cost of $60 per unit. Lawn
Lawn World Company, which produces lawn mowers, purchases 10,000 units of a rotor blade part each year at a cost of $60 per unit. Lawn World requires a 15% annual rate of return on investment. In addition, the relevant carrying cost (for insurance, materials handling, breakage, and so on) is $6 per unit per year the relevant ordening cost per purchase order is $150 Requirements 1. Calculate Lawn World's FO for the rotor blade part 2. Calculate Lawn World's annual relevant ordering costs for the EO calculated in requirement 1 3. Calculate Lawn World's annual relevant carrying costs for the EOQ calculated in requirement 1. 4. Assume that demand is uniform throughout the year and known with certainly so that there is no need for safety stocks. The purchase-order lead time is half a month. Calculate Lawn World's reorder point for the rotor blade part. Requirement 1. Calculate Lawn World's EOQ for the rotor blade part. Begin by selecting the formula used to calculate EOQ. (D = Demand in units for one year, P = Ordering cost per purchase order, C = Carrying cost of one unit in stock, Q = Any order quantity) (Round the denominator to the nearest cent.) The EOQ for the rotor blade part is units. Requirement 2. Calculate Lawn World's annual relevant ordering costs for the EOQ calculated in requirement 1. Begin by selecting the formula used to calculate Lawn World's annual relevant ordering costs. (D = Demand in units for one year, P = Ordering cost per purchase order, C = Carrying cost of one unit in stock, Q = Any order quantity) The annual relevant ordering costs for the EOQ calculated in requirement 1 is $ Requirement 3. Calculate Lawn World's annual relevant carrying costs for the COQ calculated in requirement 1. Lawn World's annual relevant carrying costs for the EOQ calculated in requirement 1 is $ Requirement 4. Assume that demand is uniform throughout the year and known with certainty so that there is no need for safety stocks. The purchase-order lead time is half a month. Calculate Lawn World's reorder point for the rotor blade part Lawn World's reorder point for the rolor blade partis
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