**Inventory Management for WiredIn**The local technology store WiredIn hired you to manage their inventory, which consists of two product configurations, Type L and Type J. Below are the data for the products. The holding cost is 24% of the unit costs.| Product | Type L | Type J ||--------------|------------------|------------------|| Demand per year $D$ | 48,000 (units) | 72,000 (units) || Unit Cost $C$ | $50 | $85 || Ordering Cost $A$ | $125/order | $125/order |**Tasks:****A.** Use the economic order quantity (EOQ) model to determine the order size for products Type L and Type J (assuming they are ordered independently).**B.** Calculate the total relevant cost associated with the EOQ calculated in part (A) (for Type L and Type J).**C.** Assume that the real ordering cost is $200 instead of $125. How large are the additional relevant costs incurred by the bad estimate of the ordering cost for Type J?**D.** If WiredIn chooses to order 1300 of Type L instead of the EOQ, calculate the percentage cost error of this order size.

Economic order quantity is the optimal quantity that an organization order to minimize the total…

Answered: 6 The local technology store Wired In…

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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