Question: Demand for an item is projected to be 1 8 0 units per month. The monthly holding cost is $ 2 per unit, and it

Demand for an item is projected to be 180 units per month. The monthly holding cost is $2 per unit, and it costs $60 to process an order.
a. Determine the EOQ. (Round the final answer to the nearest whole number.)
EOQ
units
b-1. If the vendor is willing to offer the manager a discount of $15 per order for ordering in multiples of 50 units (e.g.,50,100), would you advise the manager to take advantage of the offer?
multiple choice 1
Yes
No
b-2. If so, what order quantity would you recommend?
multiple choice 2
104
50
100
c. Alternatively, if the demand can wait at the cost of $5 per unit per month, what should the order quantity and the amount short per order cycle be?(Round the final answers to the nearest whole number.)
Order quantity
units
Amount short per order cycle
units

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!