Suppose management of Foods Galore (in solved problem 3 above) found that it had drastically underestimated its
Question:
Suppose management of Foods Galore (in solved problem 3 above) found that it had drastically underestimated its annual inventory carrying cost. Rather than the 10% carrying cost assumed in the solved problem, carrying cost is actually 25%. Rework all parts of the solved problem assuming the 25% carrying cost.
a. Economic Order Quantity
b. Economic Order Quantity at $18
c. Standard Deviation of Demand during Lead Time
Economic Order QuantityEconomic order quantity (EOQ) is the ideal order quantity a company should purchase to minimize inventory costs such as holding costs, shortage costs, and order costs. This production-scheduling model was developed in 1913 by Ford W. Harris and has...
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a Economic Order Quantity 1789 cases Average Inventory 17892 8945 cases Inventory Turnover 200000894...View the full answer
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Related Book For 
Managing Operations Across the Supply Chain
ISBN: 978-0078024030
2nd edition
Authors: Morgan Swink, Steven Melnyk, Bixby Cooper, Janet Hartley
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