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JAZ Medical Supplies is implementing a new economic order quality (EOQ) inventory- control system and needs a good estimate of the cost to process a purchase order (PO); i.e, the order cost Co. It takes five total labor hours to process a PO. The average number of SKUs on a PO is five. The average wage for people working in the purchasing department is $15 per hour plus employee benefits of $2 per hour. Fixed costs for the purchasing department are $290,000 per year assuming 1,288 hours per employee per year workweek. Given this information, what is a good estimate of Co per SKU to use in an EOQ model? Round your answer to the nearest dollar. +A per SKU

JAZ Medical Supplies is implementing a new economic order quality (EOQ) inventory- control system and needs a good estimate of the cost to process a purchase order (PO); i.e, the order cost Co. It takes five total labor hours to process a PO. The average number of SKUs on a PO is five. The average wage for people working in the purchasing department is $15 per hour plus employee benefits of $2 per hour. Fixed costs for the purchasing department are $290,000 per year assuming 1,288 hours per employee per year workweek. Given this information, what is a good estimate of Co per SKU to use in an EOQ model? Round your answer to the nearest dollar. +A per SKU

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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JAZ Medical Supplies is implementing a new economic order quality (EOQ) inventory- control system and needs a good estimate of the cost to process a purchase order (PO); i.e, the order cost Co. It takes five total labor hours to process a PO. The average number of SKUs on a PO is five. The average wage for people working in the purchasing department is $15 per hour plus employee benefits of $2 per hour. Fixed costs for the purchasing department are $290,000 per year assuming 1,288 hours per employee per year workweek. Given this information, what is a good estimate of Co per SKU to use in an EOQ model? Round your answer to the nearest dollar. +A per SKU
Transcribed Image Text:JAZ Medical Supplies is implementing a new economic order quality (EOQ) inventory- control system and needs a good estimate of the cost to process a purchase order (PO); i.e, the order cost Co. It takes five total labor hours to process a PO. The average number of SKUs on a PO is five. The average wage for people working in the purchasing department is $15 per hour plus employee benefits of $2 per hour. Fixed costs for the purchasing department are $290,000 per year assuming 1,288 hours per employee per year workweek. Given this information, what is a good estimate of Co per SKU to use in an EOQ model? Round your answer to the nearest dollar. +A per SKU
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