Question
The following represent four independent situations from which one amount is missing. Products/cases Annual Quantity Carrying (Holding) Cost/Unit Ordering Cost/Order EOQ A 4,500 $1 $?
The following represent four independent situations from which one amount is missing. Products/cases Annual Quantity Carrying (Holding) Cost/Unit Ordering Cost/Order EOQ A 4,500 $1 $? 300 B ? $30 $10 80 C 3,600 $0.12 $6 ? D 3,500 $? $5 125 Required:
1-Calculate the missing figures for each of the four products. (12 marks)
2-Using the EOQ figures , calculate the number of orders that will be placed each year for each of the products (12 marks)
3-Give examples of costs included in annual carrying (holding) costs of stock. (6 marks)
4-Currently the company purchases product C for $5 per unit. The company has been offered a 1 per cent discount on the cost of product C if it places orders in quantities of 1,200. Show the total cost at each of the EOQ & discount. What decision should the company take and why? ( 10 marks)
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