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Electronic Village stocks and sells a particular brand of computer. It costs the store PHP450 each time it places an order with the manufacturer for the personal comput- ers. The annual cost of carrying the PCs in inventory is PhP170. The store manager estimates the annual demand for the PCs will be 1,200 units. (a) Determine the optimal order policy (b) Assume that shortages are allowed and the shortage cost PhP600 per unit per year. Derive the EOQ Q* and the optimal planned backorder S* for this model. (c) Compare the two models. What model will you recommend to Electronic Village?

Electronic Village stocks and sells a particular brand of computer. It costs the store PHP450 each time it places an order with the manufacturer for the personal comput- ers. The annual cost of carrying the PCs in inventory is PhP170. The store manager estimates the annual demand for the PCs will be 1,200 units. (a) Determine the optimal order policy (b) Assume that shortages are allowed and the shortage cost PhP600 per unit per year. Derive the EOQ Q* and the optimal planned backorder S* for this model. (c) Compare the two models. What model will you recommend to Electronic Village?

Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Electronic Village stocks and sells a particular brand of computer. It costs the store PHP450 each time it places an order with the manufacturer for the personal comput- ers. The annual cost of carrying the PCs in inventory is PhP170. The store manager estimates the annual demand for the PCs will be 1,200 units. (a) Determine the optimal order policy (b) Assume that shortages are allowed and the shortage cost PhP600 per unit per year. Derive the EOQ Q* and the optimal planned backorder S* for this model. (c) Compare the two models. What model will you recommend to Electronic Village?
Transcribed Image Text:Electronic Village stocks and sells a particular brand of computer. It costs the store PHP450 each time it places an order with the manufacturer for the personal comput- ers. The annual cost of carrying the PCs in inventory is PhP170. The store manager estimates the annual demand for the PCs will be 1,200 units. (a) Determine the optimal order policy (b) Assume that shortages are allowed and the shortage cost PhP600 per unit per year. Derive the EOQ Q* and the optimal planned backorder S* for this model. (c) Compare the two models. What model will you recommend to Electronic Village?
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