MaWood Limited uses the economic order quantity (EOQ) model to establish the re order quantity for...
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MaWood Limited uses the economic order quantity (EOQ) model to establish the re order quantity for raw material Y. The company holds no buffer stock. Information relating to raw material Y is as follows: Annual Usage 48,000 units Purchase Price unit Ordering Costs order Annual holding costs of the purchase price GHc 80 per GHc 120 per 10% You are required to calculate: a. Economic Order Quantity (EOQ) for material Y b. The total annual cost for purchasing, ordering and holding stocks of material Y The supplier has offered Awo Woods Limited a discount of 1 per cent on the purchase price if each order placed is for 2000 units c. Calculate the total annual saving to Awo Limited of accepting this offer. d. List four examples of holding costs MaWood Limited uses the economic order quantity (EOQ) model to establish the re order quantity for raw material Y. The company holds no buffer stock. Information relating to raw material Y is as follows: Annual Usage 48,000 units Purchase Price unit Ordering Costs order Annual holding costs of the purchase price GHc 80 per GHc 120 per 10% You are required to calculate: a. Economic Order Quantity (EOQ) for material Y b. The total annual cost for purchasing, ordering and holding stocks of material Y The supplier has offered Awo Woods Limited a discount of 1 per cent on the purchase price if each order placed is for 2000 units c. Calculate the total annual saving to Awo Limited of accepting this offer. d. List four examples of holding costs
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To calculate the economic order quantity EOQ for material Y and the total annual cost we will use th... View the full answer
Related Book For
Essentials of Business Analytics
ISBN: 978-1285187273
1st edition
Authors: Jeffrey Camm, James Cochran, Michael Fry, Jeffrey Ohlmann, David Anderson, Dennis Sweeney, Thomas Williams
Posted Date:
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