Economic Order Quantity: Practice Exercise
Economic Order Quantity - PRACTICE EXERCISE SCM 300
Below are some the key figures important in your analysis:
Annual Per Unit Holding Costs are estimated at 30% of the wholesale cost. D = 13000
H = $60.00
C = $200.00
S = $400.00
Using Present Lot Size (Q = 1100)
Calculate the time between orders? Do Not Round.
4.40 weeks
How many orders per year are being placed annually? Do Not Round.
11.8 Orders per year
According to the information supplied, what is the present annual inventory cost? (In other words, using their present lot size what is the annual inventory cost?) Also, separately identify, the annual cost of purchasing the inventory, the annual holding cost (AHC) and annual ordering cost (AOC).
DC = $ 2,600,000
AOC = $ 4,727.27
AHC = $ 33,000
TC = $ 2,637,727.27
Using the Economic Order Quantity (Q=EOQ)
Calculate EOQ. (USE A WHOLE NUMBER, NO DECIMALS)
EOQ = 416
Using the calculated EOQ, How often will orders be placed? Weeks.
DO NOT ROUND (Show 2 decimal places)
1.67 Weeks
According to the information supplied, what would be the annual inventory cost if they used the calculated EOQ? Also, separately identify the annual holding cost (AHC) and annual ordering cost (AOC).
AHC = $ 12,490
AOC = $ 12,490
TC = $ 2,624,980
If they could order the EOQ instead of 1100, how much would this one store stand to save annually?
$12,747.28
Orders can only be taken in increments of 250 units. What would be the appropriate order size?
A. 250 units
B. 500 units
C. 750 units
D. 1000 units
Answer not provided.
According to the appropriate order size recommendation, what would be the Total Annual Inventory cost? Also, separately identify, the annual cost of purchasing the inventory, the annual holding cost (AHC) and annual ordering cost (AOC).
DC = $ 2,600,000
AHC = $ 15,000
AOC = $
Below are some the key figures important in your analysis:
Annual Per Unit Holding Costs are estimated at 30% of the wholesale cost. D = 13000
H = $60.00
C = $200.00
S = $400.00
Using Present Lot Size (Q = 1100)
Calculate the time between orders? Do Not Round.
4.40 weeks
How many orders per year are being placed annually? Do Not Round.
11.8 Orders per year
According to the information supplied, what is the present annual inventory cost? (In other words, using their present lot size what is the annual inventory cost?) Also, separately identify, the annual cost of purchasing the inventory, the annual holding cost (AHC) and annual ordering cost (AOC).
DC = $ 2,600,000
AOC = $ 4,727.27
AHC = $ 33,000
TC = $ 2,637,727.27
Using the Economic Order Quantity (Q=EOQ)
Calculate EOQ. (USE A WHOLE NUMBER, NO DECIMALS)
EOQ = 416
Using the calculated EOQ, How often will orders be placed? Weeks.
DO NOT ROUND (Show 2 decimal places)
1.67 Weeks
According to the information supplied, what would be the annual inventory cost if they used the calculated EOQ? Also, separately identify the annual holding cost (AHC) and annual ordering cost (AOC).
AHC = $ 12,490
AOC = $ 12,490
TC = $ 2,624,980
If they could order the EOQ instead of 1100, how much would this one store stand to save annually?
$12,747.28
Orders can only be taken in increments of 250 units. What would be the appropriate order size?
A. 250 units
B. 500 units
C. 750 units
D. 1000 units
Answer not provided.
According to the appropriate order size recommendation, what would be the Total Annual Inventory cost? Also, separately identify, the annual cost of purchasing the inventory, the annual holding cost (AHC) and annual ordering cost (AOC).
DC = $ 2,600,000
AHC = $ 15,000
AOC = $