Economic Order Quantity (EOQ) is a method used to calculate the ideal quantity to order. The underlying concepts of EOQ is the balance between ordering cost and holding cost. Q1. Using the data points given below, perform two calculations: Q2. Use an excel file to calculate the EOQ order. Make sure to use the formula bar to create the EQO formula. Make an excel file similar to the image attached. A = annual demand = 20,000 Cp = Cost of an order which includes preparing and following up the order = $100.00 Ch = Unit inventory cost per year or item cost (P) $100 times annual carrying cost rate (r) (25%)
Economic Order Quantity (EOQ) is a method used to calculate the ideal quantity to order. The underlying concepts of EOQ is the balance between ordering cost and holding cost. Q1. Using the data points given below, perform two calculations: Q2. Use an excel file to calculate the EOQ order. Make sure to use the formula bar to create the EQO formula. Make an excel file similar to the image attached. A = annual demand = 20,000 Cp = Cost of an order which includes preparing and following up the order = $100.00 Ch = Unit inventory cost per year or item cost (P) $100 times annual carrying cost rate (r) (25%)
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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Economic Order Quantity (EOQ) is a method used to calculate the ideal quantity to order. The underlying concepts of EOQ is the balance between ordering cost and holding cost.
Q1. Using the data points given below, perform two calculations:
Q2. Use an excel file to calculate the EOQ order. Make sure to use the formula bar to create the EQO formula. Make an excel file similar to the image attached.
A = annual demand = 20,000
Cp = Cost of an order which includes preparing and following up the order = $100.00
Ch = Unit inventory cost per year or item cost (P) $100 times annual carrying cost rate (r) (25%)
Transcribed Image Text:B12
1
2 Annual Demand
3 Order Cost
4
Unit Cost
5 Carrying Cost %
789123
10
11
12 EOQ
X✓ fx =SQRT((2*B2*B3)/(B4*B5)) I
Formula Bar
A
B
14
15 EOQ (units)
16
17
18
Formula
Formula
Formula
10,000
50.00
10.00
0.40
Order Quantity (units)
B6*C9
SQRT((2*B2*B3)/(B4*B5))
60
500.00
SQRT((2*B2*B3)/(B4*B5))
500.00
с
# Cases
per order
B15/B6
4
33.3
D
EOQ Formula
2 x (annual usage) x (ordering costs)
(unit cost $) x (Carrying cost %)
Annual
Ordering
Cost
D9*B3
$8,333.33
Orders per
year
B2/B9
166.67
B2/B15
20.00
E
F
D15*B3
$1,000.00
Annual ICC
(B9/2)*(B4*B5)
$120.00
(B15/2)*(B4*B5)
$1,000.00
G
Annual
Total Cost
E9+F9
$8,453.33
E15+F15
$2,000.00
H
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