PHF Company produces the finest home theater systems. The system is assembled using the components that are procured worldwide. Most of the items are procured from wholesalers except for some critical items such as LCD screens that are procured from their own manufacturer. The LCD screens are shipped through air from their US manufacturer. The emphasis is placed on the efficiencies of the supply chain. The area is closely scrutinized for possible cost saving measures if available. To determine: The cost savings by implementing the order plan based on EOQ.

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Chapter 12, Problem 2.3CS

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PHF Company produces the finest home theater systems. The system is assembled using the components that are procured worldwide. Most of the items are procured from wholesalers except for some critical items such as LCD screens that are procured from their own manufacturer.

The LCD screens are shipped through air from their US manufacturer. The emphasis is placed on the efficiencies of the supply chain. The area is closely scrutinized for possible cost saving measures if available.

To determine: The cost savings by implementing the order plan based on EOQ.

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