Cherylene Brown has asked you to help her determine the best ordering policy for a new product. The demand for the new product has been forecasted to be about 1,000 units annually. To help you get a handle on the carrying and ordering costs, Cherylene has given you the list of last year's costs. She thought that these costs might be appropriate for the new product. Cost Factor Taxes for the warehouse Receiving and incoming inspection New product development Acct. dept. costs to pay invoices Inventory insurance Product advertising Spoilage Sending purchasing orders Cost ($) 2,050 1,600 2,500 500 600 800 750 900 Cost Factor Warehouse supplies Research and development Purchasing salaries & wages Warehouse salaries & wages Pilferage of inventory Purchase order supplies Inventory obsolescence Purchasing dept. overhead Cost ($) 300 2,750 30,000 12,800 800 500 300 1,000 She also told you that these data were compiled for 10,000 inventory items that were carried or held during the year. You have also determined that 350 orders were placed last year. Your job as a new operations management graduate is to help Cherylene determine the economic order quantity for the new product. EOQ = units (round your response to the nearest whole number).
Cherylene Brown has asked you to help her determine the best ordering policy for a new product. The demand for the new product has been forecasted to be about 1,000 units annually. To help you get a handle on the carrying and ordering costs, Cherylene has given you the list of last year's costs. She thought that these costs might be appropriate for the new product. Cost Factor Taxes for the warehouse Receiving and incoming inspection New product development Acct. dept. costs to pay invoices Inventory insurance Product advertising Spoilage Sending purchasing orders Cost ($) 2,050 1,600 2,500 500 600 800 750 900 Cost Factor Warehouse supplies Research and development Purchasing salaries & wages Warehouse salaries & wages Pilferage of inventory Purchase order supplies Inventory obsolescence Purchasing dept. overhead Cost ($) 300 2,750 30,000 12,800 800 500 300 1,000 She also told you that these data were compiled for 10,000 inventory items that were carried or held during the year. You have also determined that 350 orders were placed last year. Your job as a new operations management graduate is to help Cherylene determine the economic order quantity for the new product. EOQ = units (round your response to the nearest whole number).
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:Cherylene Brown has asked you to help her determine the best ordering policy for a new product. The demand for the
new product has been forecasted to be about 1,000 units annually. To help you get a handle on the carrying and
ordering costs, Cherylene has given you the list of last year's costs. She thought that these costs might be appropriate
for the new product.
Cost Factor
Taxes for the warehouse
Receiving and incoming inspection
New product development
Acct. dept. costs to pay invoices
Inventory insurance
Product advertising
Spoilage
Sending purchasing orders
Cost ($)
2,050
1,600
2,500
500
600
800
750
900
Cost Factor
Warehouse supplies
Research and development
Purchasing salaries & wages
Warehouse salaries & wages
Pilferage of inventory
Purchase order supplies
Inventory obsolescence
Purchasing dept. overhead
Cost ($)
300
2,750
30,000
12,800
800
500
300
1,000
She also told you that these data were compiled for 10,000 inventory items that were carried or held during the year. You
have also determined that 350 orders were placed last year. Your job as a new operations management graduate is to
help Cherylene determine the economic order quantity for the new product.
EOQ = units (round your response to the nearest whole number).
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