The economic order quantity (EOQ). Introduction: Economic order quantity (EOQ): EOQ is the quantity of units a company must add to its inventory so as to minimize the total inventory costs. It will determine the ideal order quantity which will decrease the inventory management costs.

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Answer 1

Question

Chapter 12, Problem 17P

a)

Summary Introduction

To calculate: The economic order quantity (EOQ).

Introduction:

Economic order quantity (EOQ):

EOQ is the quantity of units a company must add to its inventory so as to minimize the total inventory costs. It will determine the ideal order quantity which will decrease the inventory management costs.

b)

Summary Introduction

To determine: The optimal number of orders per year.

Introduction:

Optimal number of orders:

The optimal number of orders is the number of orders a firm has to make such that the overall inventory cost is minimized.

c)

Summary Introduction

To calculate: The average inventory.

d)

Summary Introduction

To determine: The ordering cost.

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M. Cotteleer Electronics supplies microcomputercircuitry to a company that incorporates microprocessors intorefrigerators and other home appliances. One of the components has an annual demand of 250 units, and this is constant through-out the year. Carrying cost is estimated to be $1 per unit per year, and the ordering (setup) cost is $20 per order.a) To minimize cost, how many units should be ordered eachtime an order is placed?b) How many orders per year are needed with the optimal policy?c) What is the average inventory if costs are minimized?d) Suppose that the ordering (setup) cost is not $20, and Cotteleerhas been ordering 150 units each time an order is placed. Forthis order policy (of Q 5 150) to be optimal, determine whatthe ordering (setup) cost would have to be.

M. Cotteleer Electronics supplies microcomputer circuitry to a company that incorporates microprocessors into refrigerators and other home appliances. One of the components has an annual demand of 240 units, and this is constant throughout the year. Carrying cost is estimated to be $1.00 per unit per year, and the ordering (setup) cost is $19 per order. a) To minimize cost, how many units should be ordered each time an order is placed? Q= 2DS H b) How many orders per year are needed with the optimal policy? Annual Demand Q Orders per Year = units (round your response to two decimal places). Average Inventory = c) What is the average inventory if costs are minimized? Q 2 orders (round your response to two decimal places). units (round your response to two decimal places). d) Suppose that the ordering (setup) cost is not $21.72, and Cotteleer has been ordering 125 units each time an order is placed. For this order policy (of Q = 125) to be optimal, determine what the ordering (setup)…

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Answer 2

Question

Chapter 12, Problem 17P

a)

Summary Introduction

To calculate: The economic order quantity (EOQ).

Introduction:

Economic order quantity (EOQ):

EOQ is the quantity of units a company must add to its inventory so as to minimize the total inventory costs. It will determine the ideal order quantity which will decrease the inventory management costs.

b)

Summary Introduction

To determine: The optimal number of orders per year.

Introduction:

Optimal number of orders:

The optimal number of orders is the number of orders a firm has to make such that the overall inventory cost is minimized.

c)

Summary Introduction

To calculate: The average inventory.

d)

Summary Introduction

To determine: The ordering cost.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 12, Problem 17P

a)

Summary Introduction

To calculate: The economic order quantity (EOQ).

Introduction:

Economic order quantity (EOQ):

EOQ is the quantity of units a company must add to its inventory so as to minimize the total inventory costs. It will determine the ideal order quantity which will decrease the inventory management costs.

b)

Summary Introduction

To determine: The optimal number of orders per year.

Introduction:

Optimal number of orders:

The optimal number of orders is the number of orders a firm has to make such that the overall inventory cost is minimized.

c)

Summary Introduction

To calculate: The average inventory.

d)

Summary Introduction

To determine: The ordering cost.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 4

Question

Chapter 12, Problem 17P

a)

Summary Introduction

To calculate: The economic order quantity (EOQ).

Introduction:

Economic order quantity (EOQ):

EOQ is the quantity of units a company must add to its inventory so as to minimize the total inventory costs. It will determine the ideal order quantity which will decrease the inventory management costs.

b)

Summary Introduction

To determine: The optimal number of orders per year.

Introduction:

Optimal number of orders:

The optimal number of orders is the number of orders a firm has to make such that the overall inventory cost is minimized.

c)

Summary Introduction

To calculate: The average inventory.

d)

Summary Introduction

To determine: The ordering cost.

Expert Solution & Answer

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Answer 5

Chapter 12, Problem 17P

a)

Summary Introduction

To calculate: The economic order quantity (EOQ).

Introduction:

Economic order quantity (EOQ):

EOQ is the quantity of units a company must add to its inventory so as to minimize the total inventory costs. It will determine the ideal order quantity which will decrease the inventory management costs.

b)

Summary Introduction

To determine: The optimal number of orders per year.

Introduction:

Optimal number of orders:

The optimal number of orders is the number of orders a firm has to make such that the overall inventory cost is minimized.

c)

Summary Introduction

To calculate: The average inventory.

d)

Summary Introduction

To determine: The ordering cost.

Answer 6

Chapter 12, Problem 17P

a)

Summary Introduction

To calculate: The economic order quantity (EOQ).

Introduction:

Economic order quantity (EOQ):

EOQ is the quantity of units a company must add to its inventory so as to minimize the total inventory costs. It will determine the ideal order quantity which will decrease the inventory management costs.

Answer 7

Chapter 12, Problem 17P

a)

Summary Introduction

To calculate: The economic order quantity (EOQ).

Introduction:

Economic order quantity (EOQ):

EOQ is the quantity of units a company must add to its inventory so as to minimize the total inventory costs. It will determine the ideal order quantity which will decrease the inventory management costs.

Answer 8

b)

Summary Introduction

To determine: The optimal number of orders per year.

Introduction:

Optimal number of orders:

The optimal number of orders is the number of orders a firm has to make such that the overall inventory cost is minimized.

Answer 9

b)

Summary Introduction

To determine: The optimal number of orders per year.

Introduction:

Optimal number of orders:

The optimal number of orders is the number of orders a firm has to make such that the overall inventory cost is minimized.

Answer 10

c)

Summary Introduction

To calculate: The average inventory.

Answer 11

c)

Summary Introduction

To calculate: The average inventory.

Answer 12

d)

Summary Introduction

To determine: The ordering cost.

Answer 13

d)

Summary Introduction

To determine: The ordering cost.

Answer 14

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Answer 15

Expert Solution & Answer

Answer 16

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Answer 17

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The economic order quantity (EOQ). Introduction: Economic order quantity (EOQ): EOQ is the quantity of units a company must add to its inventory so as to minimize the total inventory costs. It will determine the ideal order quantity which will decrease the inventory management costs.

Solution Summary: The author explains the economic order quantity (EOQ) and the optimal number of orders per year.

Concept explainers

Videos

To determine: The optimal number of orders per year.

Introduction:

Optimal number of orders:

The optimal number of orders is the number of orders a firm has to make such that the overall inventory cost is minimized.

To calculate: The average inventory.

To determine: The ordering cost.

Want to see the full answer?

Chapter 12 Solutions

The economic order quantity (EOQ). Introduction: Economic order quantity (EOQ): EOQ is the quantity of units a company must add to its inventory so as to minimize the total inventory costs. It will determine the ideal order quantity which will decrease the inventory management costs.

Solution Summary: The author explains the economic order quantity (EOQ) and the optimal number of orders per year.

Concept explainers

Videos

To calculate: The economic order quantity (EOQ). Introduction: Economic order quantity (EOQ): EOQ is the quantity of units a company must add to its inventory so as to minimize the total inventory costs. It will determine the ideal order quantity which will decrease the inventory management costs.

To determine: The optimal number of orders per year. Introduction: Optimal number of orders: The optimal number of orders is the number of orders a firm has to make such that the overall inventory cost is minimized.

To calculate: The average inventory.

To determine: The ordering cost.

Want to see the full answer?

Chapter 12 Solutions

To determine: The optimal number of orders per year.

Introduction:

Optimal number of orders:

The optimal number of orders is the number of orders a firm has to make such that the overall inventory cost is minimized.