Average demand = 36 units per day,

Average lead time = 50 days,

Item unit cost = $70 for orders less than 400 units,

Item unit cost = $68 for orders of 400 units or more,

Ordering cost = $45,

Inventory carrying cost = 25%,

The business year is 250 days,

ASSUME THERE IS NO UNCERTAINTY AT ALL OR LEAD TIME

The answer below is WORNG - Please Help!

(a) EOQ at $70 price,

EOQ at $68,

(b) Annual ordering cost for unit cost $70,

Annual Ordering Cost = = $2531.25

Annual Ordering Cost for unit cost $68,

Annual Ordering Cost = = $2484.66

Ergonomics Inc. sells ergonomically designed office chairs. The company has the following information: Average demand = 36 units per day Average lead time 50 days Item unit cost-$70 for orders of less than 400 units Item unit cost $68 for orders of 400 units or more Ordering cost-$45 Inventory carrying cost = 25% The business year is 250 days Assume there is no uncertainty at all about the demand or the lead time a. Calculate EOQ If unit cost is $70 and $68. (Note: These EOQs do not need to be feasible in their price range) (Round up your answers to the next whole number.) Unit cost at $70 Unit cost at $68 EOQ units units b. Calculate annual ordering costs for each alternative? (For the first value, use your rounded EOQ from Parto. For the second value, use the lowest feasible order quantity needed to qualify for that price level. Round your answers to 2 decimal places.) Annual Ordering Cont Unit costat 570 Unit cost at 568 EOQ = 1 2 * D *S H = 2* (250 * 36) * 25 70 * 0.25 = 160.35 160 units * EOQ = 1 2 * D *S H = 2* (250 * 36) * 25 68 * 0.25 = 162.69 163units 45 * 250 * 36 160 = 2531.25 45 * 250 * 36 -) = 2484.66 163 =