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DOGGE Ltd has annual demand of 50,000 desks and the purchase price of each desk is K250. There are ordering costs of K200 for each order placed. Inventory holding costs amount to 10% per year of inventory value.   Calculate the inventory costs p.a. for the following order quantities, and plot them on a graph:    500 units, 750 units, 1000 units, 1250 units b) Using the information in (a) above calculate i) Economic Order Quantity and the total inventory costs for this order quantity.

DOGGE Ltd has annual demand of 50,000 desks and the purchase price of each desk is K250. There are ordering costs of K200 for each order placed. Inventory holding costs amount to 10% per year of inventory value.   Calculate the inventory costs p.a. for the following order quantities, and plot them on a graph:    500 units, 750 units, 1000 units, 1250 units b) Using the information in (a) above calculate i) Economic Order Quantity and the total inventory costs for this order quantity.

Practical Management Science
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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DOGGE Ltd has annual demand of 50,000 desks and the purchase price of each desk is K250. There are ordering costs of K200 for each order placed. Inventory holding costs amount to 10% per year of inventory value.

 

Calculate the inventory costs p.a. for the following order quantities, and plot them on a graph:

 

 500 units, 750 units, 1000 units, 1250 units

b) Using the information in (a) above calculate

i) Economic Order Quantity and the total inventory costs for this order quantity.

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