1) The two most important questions as an inventory manager is how much units to order and when to order. You are working as an Inventory Manager in a manufacturing company. You have forecasted that annual requirement of a part is 72,000 units. The order cost is $1000 per order, the holding rate is 20 percent and the part cost is $200 per unit. Your firm operates 360 days a year. The lead time is 06 days. Determine: Economic Order Quantity (EOQ) Annual holding cost Annual order cost, and Annual total inventory cost? Calculate the re order point.
1) The two most important questions as an inventory manager is how much units to order and when to order. You are working as an Inventory Manager in a manufacturing company. You have forecasted that annual requirement of a part is 72,000 units. The order cost is $1000 per order, the holding rate is 20 percent and the part cost is $200 per unit. Your firm operates 360 days a year. The lead time is 06 days. Determine: Economic Order Quantity (EOQ) Annual holding cost Annual order cost, and Annual total inventory cost? Calculate the re order point.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1) The two most important questions as an inventory manager is how much units to order and when to order. You are working as an Inventory Manager in a manufacturing company. You have
Your firm operates 360 days a year. The lead time is 06 days.
Determine:
- Economic Order Quantity (EOQ)
- Annual holding cost
- Annual order cost, and
- Annual total inventory cost?
- Calculate the re order point.
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