* I NEED HELP WITH [Economic Order Quantity (EOQ) ]

Assignment

Inventory Turnover

Month Inventory Cost of Goods Sold

January 1550000 1225000

February 1850000 2150000

March 1300000 1550000

April 1400000 975000

May 2000000 1350000

June 1650000 1550000

July 1250000 1100000

August 1400000 1150000

September 1700000 1700000

October 1800000 1350000

November 1200000 1400000

December 900000 1000000

Inventory Turnover= (Cost of Goods Sold )/(Average Inventory)

For this problem, we use an average monthly inventory and compare that with the total Cost of Goods Sold.

Inventory turnover =

Demand Analysis

ABC Analysis

ABC classification schemes may vary

Item Part # Item Cost Quantity Revenue Revenue % Code

In Stock

142-AZ $546.00 318 $173,628.00 8.3% ( )

4392-GF $45.00 1250 $56,250.00 2.7% ( )

86935-ES $15.35 3546 $54,431.10 2.6% ( )

173-DC $653.00 1876 $1,225,028.00 58.7% ( )

999-BA $199.00 526 $104,674.00 5.0% ( )

7846-NM $23.00 973 $22,379.00 1.1% ( )

2765-OP $385.00 790 $304,150.00 14.6% ( )

103-VX $12.50 4875 $60,937.50 2.9% ( )

2648-YT $16.75 5185 $86,848.75 4.2% ( )

TOTALS $2,088,326.35 100.0%

Indicate the level of importance based on percent of revenue for each part number.

A = 20% and above

B=6% to 19%

C= Below 5%

Economic Order Quantity (EOQ)

What is the best number to order at one time for each level.

EOQ = {[2(OQ*ROC)]/HC}

Order Cost per Selling Reorder Cost Holding Cost EOQ

Qty (OQ) per unit Per unit (ROC) (HC) per Unit

1200 10 20 90 3 ( )

400 5 11 15 1 ( )

50000 80 166 250 45 ( )

75 2 7.5 5 0.25 ( )

3000 12.75 27 11 2.25 ( )

Use the first line in the table for the next part of this question.

The best EOQ =

Fill in the blank: Should order ________ units at a time. This is the lowest cost overall.

Explain your answer: