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Solve this inventory holding cost problem ?
Asked by: smohpal
from New Delhi, India
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Shawn's machine shop uses 2,500 brackets during the course of a year. These brackets are purchased from a supplier 90 miles away. The following information is known about the brackets.
Annual demand : 2,500 pieces
Holding cost per bracket per year: $1.50
Order cost per order : $18.75
Lead time : 2 days
Working days per year : 250
a) Given the above information, what would be the economic order quantity (EOQ)?
b) Given the EOQ, what would be the average inventory?
c) Given the EOQ, how many orders would be made each year?
d) Given the EOQ, what is the total annual inventory cost?
e) What is the time between orders?
f) What is the reorder point (ROP)?
Annual demand : 2,500 pieces
Holding cost per bracket per year: $1.50
Order cost per order : $18.75
Lead time : 2 days
Working days per year : 250
a) Given the above information, what would be the economic order quantity (EOQ)?
b) Given the EOQ, what would be the average inventory?
c) Given the EOQ, how many orders would be made each year?
d) Given the EOQ, what is the total annual inventory cost?
e) What is the time between orders?
f) What is the reorder point (ROP)?
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a) 250 brackets per order
b) 125 units
c) 10 orders/year
d) $375 per year
e) 25 days
f) 20 units
b) 125 units
c) 10 orders/year
d) $375 per year
e) 25 days
f) 20 units
Source: Operations Management Book :)
Answer Date: 08:09pm 12/21/07
Best Answer Comments from Asker: smohpal
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Thank you Angel. You have solved my great problem. You deserve it. |
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This is one of my favorite subjects. I made better profits using this.
a. 231
b. 227
c. 11
d.$47215.50 provided you adhered strictly to the protocol.
e.33 days
f. Now we are into a bit of philosophy. The answer is 14 plus what kind of...
a. 231
b. 227
c. 11
d.$47215.50 provided you adhered strictly to the protocol.
e.33 days
f. Now we are into a bit of philosophy. The answer is 14 plus what kind of...
Answer Date: 11:26am 12/21/07
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Annual demand : 2,500 pieces
Holding cost per bracket per year: $1.50
Order cost per order : $18.75
Lead time : 2 days
Working days per year : 250
a) Given the above information, what would be the economic order quantity ...
Holding cost per bracket per year: $1.50
Order cost per order : $18.75
Lead time : 2 days
Working days per year : 250
a) Given the above information, what would be the economic order quantity ...
Source: http://www.cargalmathbooks.com/The%20EOQ%20Formula... , http://www.usfca.edu/~villegas/classes/984-307/307...
Answer Date: 10:21pm 12/28/07
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