Question: Given the following information for an important purchased part, compute the (a) EOQ (b) Total purchase cost (c) Annual holding cost (d) Annual order cost

Given the following information for an important purchased part, compute the

(a) EOQ

(b) Total purchase cost

(d) Annual order cost

(e) Annual total cost

(f) Reorder point

(g) Number of orders placed per year

(h) Time between orders.

(i) Use Microsoft Excel to plot the cost curves (annual holding cost, annual order cost and annual total cost) on the vertical axis, and the order quantity on the horizontal axis.

Monthly demand = 3,500 units

Order cost (S) = $250 per order

Holding cost (kC)= $8.65 per unit per year

Unit cost (C)= $85 per unit

Lead time (LT) = 12 days

Number of days per year = 365 days

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a EOQ 2RSkC 155812 units b Total purchase cost R C 42000 units 85 3570000 c Annual holding c... View full answer

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