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Select Machine Company produces lawn mowers and purchases 18,000 units of a rotor blade art each yeara a cost of 40 per unit elec Machinere
Select Machine Company produces lawn mowers and purchases 18,000 units of a rotor blade art each yeara a cost of 40 per unit elec Machinere uire a 12% annual rate of return on investment. In addition, the relevant carrying cost (for insurance, materials handling, breakage, etc.) is $2.20 per unit per year. The relevant ordering cost per purchase order is $280 Read the requirements Requirement 1. Calculate Select Machine's EOQ for the rotor blade part. Begin by selecting the formula used to calculate EOQ. Q- Any order quantity) D-Demand in units for one year, P = Ordering cost per purchase order, C-Carrying cost of one unit in stock. -X Requirements 1. Calculate Select Machine's EOQ for the rotor blade part. 2. Calculate Select Machine's annual relevant ordering costs for the EOQ 3. Calculate Select Machine's annual relevant carrying costs for the EoQ 4. Assume that demand is uniform throughout the year and known with certainty calculated in requirement1 calculated in requirement 1 so that there is no need for safety stocks. The purchase-order lead time is half a month. Calculate Select Machine's reorder point for the rotor blade part
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