Question: A) What is the EOQ? B) What is the average inventory if the EOQ is used? C) What is the optimal number of orders per

A) What is the EOQ?

B) What is the average inventory if the EOQ is used?

C) What is the optimal number of orders per year?

D) What is the optimal number of days in between any two orders?

E) What is the annual cost of ordering and holding inventory?

F) What is the total annual inventory cost, including the cost of the 6,000 units?

Please help with all parts. Thank you!

Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastest-moving inventory item has a demand of 5,900 units per year. The cost of each unit is $101, and the inventory carrying cost is $11 per unit per year. The average ordering cost is $31 per order. It takes about 5 days for an order to arrive, and the demand for 1 week is 118 units. (This is a corporate operation, and there are 250 working days per year)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!

Question 1- Mohsen as the operations manager of a manufacturing firm wants to make purchasing decisions for a specific item. The demand of the item is 6000 per year. The cost of holding an item is...

only solve part g and h rest is solved must solve g and h other wise i will post bad review Problem 3. - Question 12.12, page 503 (a to f) with the following adjustments. Change the lead time to two...

Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas' fastest-moving inventory item has a demand of 6,000 units...

answer 12.12 and 12.13 b) Why is this number important to Duncan! .. 12.12 Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory...

er year). A) What is the EOQ? B) What is the average inventory if the EOQ is used? C) What is the optimal number of orders per year? D) What is the optimal number of days in between any two orders?...

QUESTION 2 Karel Smith is the purchasing manager for the headquarters of a large insurance company with a central inventory operation. Karel's fastest-moving inventory item has a demand of 6,000...

Course: Quantitative Methods QUESTION 1 - SHOW ALL WORKINGS Consider the activities, durations, and predecessor relationships in the following network. Draw the network and answer the questions that...

Q1. One of the best-selling beds in IKEA has an annual demand of 400 units. Ordering cost is $40; holding cost is $5 per unit per year. a) To minimize the total cost, how many units should be ordered...

Use information from Table 16.2 to answer the following questions about sound in air. At 20oC the bulk modulus for air is 1.42 X 105 Pa and its density is 1.20 kg/m3. At this temperature, what are...

Describe the current state of extraterrestrial planet finding. About how many planets have been found? Have any "earth-like" worlds been found? What are the challenges to finding this type of planet?

MJ Melendez is considering a new project that will cost $ 2 8 , 1 0 0 . The project will have a three year life and will be depreciated on a straight line basis for those three years. The project...

Read the articles on journaling and review the template provided. Identify what approach, to journaling, in the articles you found useful and why. Post to the discussion forum that you have reviewed...