Question: Extend the simple EOQ model to the Quantity Discount Model. The values of the parameters are: D=12000,S=269.C=$38.00,I=0.23,H=IC=8.74 W=240,m=7.y=D/W,r=ym.T=Q/y. or T=EOQ/y. (1) What is the Economic

Extend the simple EOQ model to the Quantity Discount Model.

The values of the parameters are: D=12000,S=269.C=$38.00,I=0.23,H=IC=8.74 W=240,m=7.y=D/W,r=ym.T=Q/y. or T=EOQ/y. (1) What is the Economic Order Quantity (Optimal Order Quantity)? EOQ=H2DS=8.74212000269=859.46 (2) Suppose you order every time a quantity equal to the EOQ. Then, what is the number of orders placed in a year? N=EOQD=859.4612000=13.96 (3) Suppose you order every time a quantity equal to the EOQ. Then, what is the annual cost of placing the orders? (Hint: You need to calculate AOC ) AOC=(EOQD)S=(859.4612000)269=3755.85 (4) Suppose you order every time a quantity equal to the EOQ. Then, what is the annual cost of holding the inventory? (Hint: You need to calculate AHC) AHC=21(EOQ)H=2859.468.74=3755.84 (5) Suppose you order every time a quantity equal to the EOQ. Then, what is the total cost of placing the orders and holding inventory per year? (Hint: You need to calculate: TC=AOC+AHC ) TC=AOC+AHC=3755.85+3755.84=7511.69 (6) What is the cycle time under the EOQ policy? y=D/W=12000/24050.T=EOQ/y=859.46/5017.189 (7) What is the re-order point under the EOQ policy? r=ym=507=350

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