Question
The annual requirement of a part is 310,200 units. The order cost is $140 per order, the holding rate is 14 percent and the part
The annual requirement of a part is 310,200 units. The order cost is $140 per order, the holding rate is 14 percent and the part cost is $2,000 per unit. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Do not round intermediate calculations. Round your answers according to the input instructions for each question but use the unrounded values in the further calculations.
Annual requirements in units (R) | 310,200 |
Order cost (S) | $140 |
Holding rate (k) | 14% |
Unit cost (C) | $2,000 |
Lot size (Q) | 2,200 |
Questions
a. What is the economic order quantity? Round your answer to the nearest whole number.
b. What is the annual holding cost? Round your answer to the nearest dollar.
c. What is the annual order cost? Round your answer to the nearest dollar.
d. What is the total annual inventory cost? Round your answer to the nearest dollar.
e. What is the annual holding cost if the company decided to order at a lot size of 2,200 units instead of the EOQ quantity? Round your answer to the nearest dollar.
f. What is the annual order cost if the company decided to order at a lot size of 2,200 units instead of the EOQ quantity? Round your answer to the nearest dollar.
g. What is the total annual inventory cost if the company decided to order at a lot size of 2,200 units instead of the EOQ quantity? Round your answer to the nearest dollar.
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