Answered step by step
Verified Expert Solution
Question
1 Approved Answer
picture #2 is the new problem. picture #1 is what needs to be answer. Thomas Kratzer is the purchasing manager for the headquarters of a
picture #2 is the new problem. picture #1 is what needs to be answer.
Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastest-moving inventory item has a demand of 5,900 units per year. The cost of each unit is $103, and the inventory carrying cost is $9 per unit per year. The average ordering cost is $31 per order. It takes about 5 days for an order to arrive, and the demand for 1 week is 118 units. (This is a corporate operation, and there are 250 working days per year). a) What is the EOQ? 201.60 units (round your response to two decimal places). b) What is the average inventory if the EOQ is used? 100.80 units (round your response to two decimal places). c) What is the optimal number of orders per year? 29.277 orders (round your response to two decimal places). d) What is the optimal number of days in between any two orders? 8.544 days (round your response to two decimal places). e) What is the annual cost of ordering and holding inventory? $1,814.44 per year (round your response to two decimal places): f) What is the total annual inventory cost, including the cost of the 5,900 units? \$ per year (round your response to two decimal places). Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastest-moving inventory item has a demand of 5,900 units per year. The cost of each unit is $101, and the inventory carrying cost is $11 per unit per year. The average ordering cost is $29 per order. It takes about 5 days for an order to arrive, and the demand for 1 week is 118 units, (This is a corporate operation, and there are 250 working days per year) 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