2. The ABC Company consumes inventory of 67,500units of components per year. The carrying cost perunit is RO 1.50. The fixed order cost is RO 25 per order.The production planning is 365-day year.a. What is the Economic Order Quantity (EOQ)?Interpret.b. Calculate and interpret the optimal number of ordersto be placed.c. If it takes five days to receive an order fromsuppliers, at what inventory level should ABC Companyplace another order.Interpret.

Inventory management refers to the process including ordering, storing and using a company's…

Answered: 2. The ABC Company consumes inventory…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Similar questions

Sumco's annual demand is expected to increase from 1,000 units to 1,500 units, the ordering cost is reduced to $8 per order and the average carrying cost per unit per year is increased to $0.80. Under these new conditions: A) Calculate the new EOQ. B) Calculate the Annual Ordering Cost, the Annual Holding Cost and the Total Annual Cost. C) Plot a graph showing Ordering Cost, Holding Cost and Total Cost as a function of Q for this problem Predictions: On acer
The annual demand, ordering cost, and the annual inventory carrying cost rate for a certain item are 600 units, Quantity 1 to 49 50 to 249 250 and up Price $5.00/unit $4.50/unit $ 4.10/unit $20/order and 30% of item price, respectively. (a) Assume the discounts applied to all the units in the order, what should the order quantity be in order to minimize the average annual cost? Also, show the minimal average annual cost. (b) Assume the discounts applied to the units are incremental, what should the order quantity be in order to minimize the average annual cost? Also, show the minimal average annual cost.
The seasonal demand for a particular product is given below: Period 1 2 3 4 5 6 Demand 300 450 100 450 450 100 The fixed parameters are: Fixed Cost $8 Unit Production Cost $1 Holding Cost $1.3 Calculate total ordering cost using following three methods: i) Lot-for-Lot ii) Wagner-Whitin algorithm iii) Fixed order quantity Please do fast .. ASAP.. fast
10. A company will sell remote control devices online. Expected yearly demand is 3000 units and it is sold per 250TL. The controllers can be purchased from supplier A. Ordering cost is 40 TL and annual holding cost is 25% of the price. a. Calculate the economic order quantity for the company. b. Calculate the number of orders per year. c. List the assumptions of EOQ model that you used to calculate the value in part A.
Discuss considerations that should be fully taken into account when developing inventory related relevant costs for use in an economic order quantity (EOQ) model. Why do conflicts arise between the EOQ model's optimal order quantity and the order quantity that managers regard as optimal?
3 Which of the following inventory models considers backorder costs? O a. Economic Order Quantity with Quantity Discounts O b. Basic Economic Order Quantity C. Economic Order Quantity with Planned Shortages Od. Economic Production Quantity
Help with the following questions.
3. Skinner’s Fish Market buys fresh Boston bluefish daily for $4.20 per pound and sells it for $6 per pound. At the end of each business day, any remaining bluefish is sold to a producer of cat food for $3 per pound. Daily demand can be approximated by a normal distribution with a mean of 64 pounds and a standard deviation of 11 pounds. What is the optimal order quantity (stocking level)? Round your answer to 2 decimal places. Answer:_______
The purpose of EQQ is: A. measure the cost of ordering inventory B. to lower the level of inventory C. to determine the optimal amount of inventory to order D. to find the number of days before inventory needs to be reordered
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