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The Omnigroup stocks and sells Kipor generators. The firm gathered the following information from its Kathmandu office:

The Omnigroup stocks and sells Kipor generators. The firm gathered the following information from its Kathmandu office:

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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3) The Omnigroup stocks and sells Kipor generators. The firm gathered the following information from its Kathmandu office:

 

Demand = D = 19,500 units per year

Ordering cost = S = $25.60 per order

Holding cost = H = $4.40 per unit per year

 

The firm wants to calculate the:

 

  1. a) EOQ for the Kipor generators.
  2. b) Annual holding costs for the Kipor generators.
  3. c) Annual ordering costs for the Kipor generators.

 

Hint:

EOQ = square root of (2DS/H)

Annual Holding Cost = (Q/2) H

Annual Ordering Cost = (D/Q) S

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