Question
Surge Electric uses 5; 600 toggle switches a year. It costs $140 to prepare an order and receive it, and annual carrying cost is $0.2
Surge Electric uses 5; 600 toggle switches a year. It costs $140 to prepare an order and receive it, and annual carrying cost is $0.2 per unit.
1. [3 marks] Determine the EOQ.
2. [4 marks] Under EOQ, what are the average number of orders per year and the length of each order cycle (in weeks)? Assume one year has 52 weeks.
3. [9 marks] Switches are priced as in the table below. Suppose the optimal order quantity equals EOQ, what is the maximum unit price c1 for the first price range (when the number of switches is between 1 and 3,999)?
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Matching Supply with Demand An Introduction to Operations Management
Authors: Gerard Cachon, Christian Terwiesch
3rd edition
73525200, 978-0073525204
