Demand for Container X-100 is 110 per week. There are 52 weeks per year. The typical...

 

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Demand for Container X-100 is 110 per week. There are 52 weeks per year. The typical lead time to get containers is 3 weeks. The interest rate (holding cost rate) is 40%. The cost per order is $300 and the cost per container is $45. Determine the total costs using EOQ and compare it to the total costs of ordering twice a year (which has a per unit discount of $2 and a lead time of 5 weeks). What is the best ordering policy? Demand for Container X-100 is 110 per week. There are 52 weeks per year. The typical lead time to get containers is 3 weeks. The interest rate (holding cost rate) is 40%. The cost per order is $300 and the cost per container is $45. Determine the total costs using EOQ and compare it to the total costs of ordering twice a year (which has a per unit discount of $2 and a lead time of 5 weeks). What is the best ordering policy?

Answer rating: 100% (QA)

To determine the best ordering policy calculate the total costs using both Economic Order Quantity E... View the full answer