An auto parts supplier sells batteries to car dealers and auto mechanics. The annual demand is approximately 1,200 batteries. The suppliers pays $28 for each battery and estimates that the annual holding cost is $8.40 per year. It costs approximately $20 to place an order. Assume a 250-day working year. a. Compute for the EOQ round off your answer to the nearest whole number. b. Compute for the expected number of orders. Round off your answer to the nearest whole number. c. Compute for the expected time between orders. Round off your answer to the nearest whole number.
An auto parts supplier sells batteries to car dealers and auto mechanics. The annual demand is approximately 1,200 batteries. The suppliers pays $28 for each battery and estimates that the annual holding cost is $8.40 per year. It costs approximately $20 to place an order. Assume a 250-day working year. a. Compute for the EOQ round off your answer to the nearest whole number. b. Compute for the expected number of orders. Round off your answer to the nearest whole number. c. Compute for the expected time between orders. Round off your answer to the nearest whole number.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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An auto parts supplier sells batteries to car dealers and auto mechanics. The annual demand is approximately 1,200 batteries. The suppliers pays $28 for each battery and estimates that the annual holding cost is $8.40 per year. It costs approximately $20 to place an order. Assume a 250-day working year.
a. Compute for the EOQ round off your answer to the nearest whole number.
b. Compute for the expected number of orders. Round off your answer to the nearest whole number.
c. Compute for the expected time between orders. Round off your answer to the nearest whole number.
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