EOQ quiz 5
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School
Algonquin College *
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Course
2303
Subject
Industrial Engineering
Date
Dec 6, 2023
Type
docx
Pages
2
Uploaded by PresidentRabbitMaster662
Calculate
Economic Order Quantity
(EOQ) from the following:
Annual consumption 6,500 units
Cost of ordering $60
Carrying costs $2
Round your answer to 2 decimal places
Question 2
(1 point)
ABC Inc produces fertilizer to sell to wholesalers. One raw material: calcium
nitrate is purchased from a nearby supplier at $22.50 per ton. ABC Inc estimates it
will need 5,750,000 tons of calcium nitrate next year.
The annual carrying cost for this material is 40% of the unit cost, and the ordering
cost is $570.
What is the most economical order quantity? Round your answer to 2 decimal
places.
Question 3
(1 point)
Calcium nitrate is purchased from a nearby supplier at $22.50 per ton. ABC Inc
estimates it will need 5,750,000 tons of calcium nitrate next year. The annual
carrying cost for this material is 40% of the acquisition cost, and the ordering cost
is $590.
What is the average inventory?
Do not round your EOQ; round your average inventory answer to 2 decimal places.
Question 4
(1 point)
The following details are provided: Annual demand is 90,000 units, cost per order
is $74, holding costs are 10% of the cost of the unit and each unit costs $50. The
business operates 282 days per year. The delivery lead time is 3 days.
Calculate the ROP. NOTE: round only your ROP answer to 2 decimal places.
Question 5
(1 point)
The following details are provided: Annual demand is 9,000 units, cost per order is
$55, holding costs are estimated to be $16 per unit per year. The business operates
296 days per year. The delivery lead time is 2 days.
Calculate the number of orders. NOTE: round only your ROP answer to 2 decimal
places.
Question 6
(1 point)
A machine shop that operates 250 days per year uses 2,200 brackets during the
course of a year. These brackets are purchased from a supplier 90 kilometers
away. The lead time is 2 days. The following information is known about the
brackets: holding cost per bracket per year is $1.50 and the per order costs is
$18.75
Calculate the annual cost to manage the inventory. NOTE: round only your final
answer to 2 decimal places.
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