Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Suppose the annual demand for an inventoried item is 1, 200 units. The holding cost for it is $3 per unit per year. The ordering
Suppose the annual demand for an inventoried item is 1, 200 units. The holding cost for it is $3 per unit per year. The ordering cost is $50 per order. In this problem, R = _______: C = _____: H = _______ If the current order quantity is Q = 100 units per order, then (a) The total annual ordering cost = C*(R/Q) = _____ (b) The total annual holding cost = H*(Q/2) = _____ (c) The total annual inventory cost = ______ Calculate the economical order quantity, Q*, for this problem. Q* = squareroot 2CR/H = With the economical order quantity Q* as you have just calculated, (a) How many orders will be placed in a year? (b) What is the total annual ordering cost? (c) What is the average inventory level? (d) What is the total annual holding cost? (e) What is the total annual inventory cost? Suppose the order quantity is Q = 300 units per order. (5a) Without calculations, the total inventory cost associated with this order quantity must be _____ that with Q*, the economical order quantity. a. higher than b. lower than c. equal to (5b) Calculate the total annual inventory cost associate with this order quantity. The total annual inventory cost associated with the economical order quantity, Q*, is the lowest comparing to any other order quantities. a. True b. False At the EOQ, the total annual holding cost is always ______ the total annual ordering cost. a. greater than b. smaller than c. different from d. same as e. None of the above. It depends on specific problems
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