Alpha co. sells a single type of product. The demand rate/consumption rate for this product is...

  

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Alpha co. sells a single type of product. The demand rate/consumption rate for this product is 2 units per day. The lead time for procuring the product is one week i.e. 7 calendar days. Given: unit price of the item = $50 holding cost as a per dollar of unit price per month = 0.04166666 cost of each order during the year = $9 a) Draw the EOQ Model for the above fixed order quantity system, determine and indicate the Economic Order Quantity (Qo), Re-order point (ROP) and the cycle length (i.e. the time interval between two orders in days). A year is 360 days or 12 months. (10 marks) Alpha co. sells a single type of product. The demand rate/consumption rate for this product is 2 units per day. The lead time for procuring the product is one week i.e. 7 calendar days. Given: unit price of the item = $50 holding cost as a per dollar of unit price per month = 0.04166666 cost of each order during the year = $9 a) Draw the EOQ Model for the above fixed order quantity system, determine and indicate the Economic Order Quantity (Qo), Re-order point (ROP) and the cycle length (i.e. the time interval between two orders in days). A year is 360 days or 12 months. (10 marks)

Answer rating: 100% (QA)

The EOQ model formula is EOQ sqrt2DSH Where D Demand rate 2 units per day S ... View the full answer