Question
Miguel was is the process of completing the quarterly planning for the purchasing department when a major computer malfunction lost most of his data. He
Miguel was is the process of completing the quarterly planning for the purchasing department when a major computer malfunction lost most of his data. He was able to recover the following:
Orders per year | 40 |
Average daily demand | 48 |
Working days per year | 250 |
Annual ordering costs | $ 4,000 |
Annual carrying costs | $30/unit |
Miguel purchases at the EOQ quantity level.
a. Determine the annual demand (1 mark)
b. Determine the cost of placing an order (1 mark)
c. Calculate the EOQ (2 mark)
d. Calculate the annual ordering costs (1 mark)
e. Calculate the annual carrying costs (1 mark)
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