A retailer uses the EOQ model with uncertain demand rate (and positive lead time) to manage the inventory of a product. Which of the following expressions calculates the annual inventory turnover? Note: 1-D is the annual demand, Q is the order quantity, H is the unit annual holding cost, S is the fixed ordering cost and SS is the safety stock. 2-Value of inventory and cost of goods are both measured by the purchase cost of the product. Recall that inventory turnover is calculated based on the annual goods sold, which is equal to the annual demand, and the average inventory value. 2DS/H D Q/2 + SS Previous Page V 06 D D Q D Q/2
A retailer uses the EOQ model with uncertain demand rate (and positive lead time) to manage the inventory of a product. Which of the following expressions calculates the annual inventory turnover? Note: 1-D is the annual demand, Q is the order quantity, H is the unit annual holding cost, S is the fixed ordering cost and SS is the safety stock. 2-Value of inventory and cost of goods are both measured by the purchase cost of the product. Recall that inventory turnover is calculated based on the annual goods sold, which is equal to the annual demand, and the average inventory value. 2DS/H D Q/2 + SS Previous Page V 06 D D Q D Q/2
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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Transcribed Image Text:A retailer uses the EOQ model with uncertain demand rate (and positive lead time)
to manage the inventory of a product. Which of the following expressions calculates
the annual inventory turnover?
Note:
1-D is the annual demand, Q is the order quantity, H is the unit annual holding
cost, S is the fixed ordering cost and SS is the safety stock.
2-Value of inventory and cost of goods are both measured by the purchase cost of
the product. Recall that inventory turnover is calculated based on the annual goods
sold, which is equal to the annual demand, and the average inventory value.
√/2DS/H
D
Q/2 + SS
D
O
Previous Page
D
Q
D
Q/2
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