Question: I need help figuring out the yellow boxes. Thank you. I believe I got the two that are filled in correct, but not the third.
I need help figuring out the yellow boxes.
Thank you. I believe I got the two that are filled in correct, but not the third.
Economic Order Quantity Demand = 10,000 Annual Requirements or Demand Cost per item = $ 150.00 Purchase cost per Unit A = $ 1,500,000 Annual Usage, in dollars B = $ 125.00 Administrative costs per order of placing the order C = 28% Carrying costs of the inventory (expressed as an annual percentage of the inventory dollar value) EOQ value = $ 36,596.25 (exact value) EOQ units (rounded number) Using this inventory management system, every time that you need to order this item, you buy EOQ of them! EXTRA: What if your supplier requires you to purchase only in Cases of 60 units each? How much extra would this cost in a year? Hint -- use the the table on the "Chart data" tab for the computation of "Total Annual Cost" for your EOQ and the best Case Lot. When to order is another question.... See the next assignment to compute the Reorder PointStep by Step Solution
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