A company has annual demand for its product of 50,000 units. Each unit costs 1.50. Ordering...
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A company has annual demand for its product of 50,000 units. Each unit costs €1.50. Ordering costs are €55 per order and the annual holding cost per unit is €1. Required: (i) (ii) (iii) Using the information above, calculate the Economic Order Quantity (EOQ). [4 marks] Using the information above, determine if the optimum ordering quantity would change if the supplier offered a discount of 1% as long as at least 4,000 units were ordered each time. [3 marks] Recommend if the company should increase the number of units ordered [2 marks] A company has annual demand for its product of 50,000 units. Each unit costs €1.50. Ordering costs are €55 per order and the annual holding cost per unit is €1. Required: (i) (ii) (iii) Using the information above, calculate the Economic Order Quantity (EOQ). [4 marks] Using the information above, determine if the optimum ordering quantity would change if the supplier offered a discount of 1% as long as at least 4,000 units were ordered each time. [3 marks] Recommend if the company should increase the number of units ordered [2 marks]
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Demand D 50000 Unit cost 15 Ordering cost S 55 Holding cost H 1 1 Economic ... View the full answer
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