The sales of a popular mouthwash at Merkle Pharmacies over the past 6 months have averaged 1,800 cases per month resulting in 21,600 cases per month, which is the current order quantity. Merkle’s cost is $14.00 per case. The company estimates its cost of capital to be 10 percent. Insurance, taxes, breakage, handling, and pilferage are estimated to be approximately 5 percent of item cost. Thus, the annual inventory-holding costs are estimated to be 15 percent of item cost. The cost of placing an order is estimated to be $36.00 per order regardless of the quantity requested in the order. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. 1. What is the minimum-cost economic order quantity? Round your answer to the nearest whole number. fill in the blank 2 cases 2. What is the annual ordering cost based on the minimum-cost economic order quantity? Use the rounded EOQ value in your calculations. Round your answer to the nearest cent. $ fill in the blank 3 3. What is the annual inventory holding cost based on the minimum-cost economic order quantity? Use the rounded EOQ value in your calculations. Round your answer to the nearest cent. $ fill in the blank 4 4. What is the total annual cost based on the minimum-cost economic order quantity? Use the rounded EOQ value in your calculations. Round your answer to the nearest cent. $ fill in the blank 5 5. What are the total cost savings in absolute terms caused by using the minimum-cost economic order quantity instead of the current purchasing policy of Q = 1,800? Use the rounded EOQ value in your calculations. Round your answer to the nearest cent. $ fill in the blank 6 6. Choose the correct graph for the cost functions
The sales of a popular mouthwash at Merkle Pharmacies over the past 6 months have averaged 1,800 cases per month resulting in 21,600 cases per month, which is the current order quantity. Merkle’s cost is $14.00 per case. The company estimates its cost of capital to be 10 percent. Insurance, taxes, breakage, handling, and pilferage are estimated to be approximately 5 percent of item cost. Thus, the annual inventory-holding costs are estimated to be 15 percent of item cost. The cost of placing an order is estimated to be $36.00 per order regardless of the quantity requested in the order. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below.
1. What is the minimum-cost economic order quantity? Round your answer to the nearest whole number.
fill in the blank 2 cases
2. What is the annual ordering cost based on the minimum-cost economic order quantity? Use the rounded EOQ value in your calculations. Round your answer to the nearest cent.
$ fill in the blank 3
3. What is the annual inventory holding cost based on the minimum-cost economic order quantity? Use the rounded EOQ value in your calculations. Round your answer to the nearest cent.
$ fill in the blank 4
4. What is the total annual cost based on the minimum-cost economic order quantity? Use the rounded EOQ value in your calculations. Round your answer to the nearest cent.
$ fill in the blank 5
5. What are the total cost savings in absolute terms caused by using the minimum-cost economic order quantity instead of the current purchasing policy of Q = 1,800? Use the rounded EOQ value in your calculations. Round your answer to the nearest cent.
$ fill in the blank 6
6. Choose the correct graph for the cost functions
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