Question
QUESTION (2) XXX Ltd carries a wide assortment of luxury teddy bears for its customers. One item, KPS is very popular. In order to keep
QUESTION (2) XXX Ltd carries a wide assortment of luxury teddy bears for its customers. One item, KPS is very popular. In order to keep its stock under control, a decision is taken by management to order only the optimum economic quantity, for this item, each time. You have the following information. Annual demand (units) 288,000 Purchase price per unit $ 800 Carrying/Holding costs per unit $ 24 Cost per order $ 1500 Required: 1. Determine the EOQ using the equation method. Compute the ordering, holding and their total costs 2. Develop the following table by using the Tabular method. No. of orders 1 10 20 30 90 120 Order size Average stock Carrying (Holding) costs Order costs Total costs
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