A salon shampoo supplier presents the following data in respect of their purchases Annual demand 200 000 units Maximum daily requirement 1 500 units Average daily requirement 1 050 units Carrying cost R 1, 50 per unit Ordering cost R 40 per order Lead time 12 days Time needed to acquire emergency s...

To determine the economic order quantity EOQ ordering point and danger level for the salon shampoo supplier you can use the EOQ model The EOQ model he ...

A salon shampoo supplier presents the following data in respect of their purchases: Annual demand 200 000

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A salon shampoo supplier presents the following data in respect of their purchases:

Annual demand 200 000 units

Maximum daily requirement 1 500 units

Average daily requirement 1 050 units

Carrying cost R 1, 50 per unit

Ordering cost R 40 per order

Lead time 12 days

Time needed to acquire emergency supplies 3 days

NB: Assume that sales are even throughout the year.

Required

Determine the economic order quantity (EOQ).

Determine the ordering point.

Calculate the danger level.

Discuss the assumptions made by the EOQ model.

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International Financial Reporting and Analysis

ISBN: 978-1408075012

5th edition

Authors: David Alexander, Anne Britton, Ann Jorissen

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Posted Date: Sep 09, 2023 04:31 AM

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A salon shampoo supplier presents the following data in respect of their purchases: Annual demand 200 000

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To determine the economic order quantity EOQ ordering point and danger level for the salon shampoo supplier you can use the EOQ model The EOQ model he... View the full answer

International Financial Reporting and Analysis

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