Question: 1. Seans Super Gadgets Ltd has won an order for power gizmos. The demand is 19,500 units per year. The ordering cost is $25 per

1. Seans Super Gadgets Ltd has won an order for power gizmos. The demand is 19,500 units per year. The ordering cost is $25 per order and the holding cost currently is $4 per unit per year. Marks = 10

a) Calculate the economic order quantity for the books Marks = 4

b) What is the annual holding cost? Marks = 3

c) What are the annual ordering costs? Marks =3

2. International Whatiz Ltd. is going to expand its manufacturing facilities. Three locations are being considered: Option A - Airdrie, Option B - Canmore, and Option C - Buffalo Jump. The lowest cost should be for the initial forecast of 5,000 units per year. Marks = 10

Part 2 OPM 400 Final Test Calculations - Written Answers Fall 2021

PART 2 Essay/Calculations Questions 10 Marks Each for a Total of 40 Marks

Required Questions Show Calculations Underline, Circle, or Highlight Answers

a) Calculate the economic order quantity for the books Marks = 4

b) What is the annual holding cost? Marks = 3

c) What are the annual ordering costs? Marks =3

Location	Fixed Costs	Variable costs
Option A - Airdrie	25,000	80.00
Option B - Canmore	105,000	40.00
Option C - Buffalo Jump	75,000	45.00

Produce a graph with total cost lines for each location. (Marks = 3)
Calculate and show the work the crossover points for options 1 vs 2, 2 vs 3, and 1 vs 3. (Marks = 6)
Which is the best location? (Marks = 1)

Produce a graph with total cost lines for each location. (Marks = 3)
Calculate and show the work the crossover points for options 1 vs 2, 2 vs 3, and 1 vs 3. (Marks = 6)
Which is the best location? (Marks = 1)

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