In the basic EOQ model, if Demand is 3000 per month, Fixed cost is $200 per order, unit

cost is $50, and holding cost per year as a fraction of unit cost is 5%., what is the economic order quantity?

Reconsider the Q3, what is the total annual inventory cost if the company makes an order every year?

a) About $1,806,000

b) About$1,255,000

c) About $1,806,150

d) About$151,732

e) About $1,845,200

f) None of the above.

Q11. (10 pts.) A product whose EOQ is 40 units experiences a decrease in ordering cost from $90 per order to $22.5 per order. The revised EOQ is:

a) three times as large.

b) one-third as large.

c) nine times as large.

d) one-ninth as large.

e) half as large.

f) cannot be determined.

Q12. (10 pts.) Assume you are producing vehicles. Every month you make 500 vehicles (4-tire vehicles). Your supplier charges you $20 per tire. Your inventory holding cost is estimated to be 14% of unit cost and the ordering is $64 per order. You are working for 11 months per year.

Which of the followings show the inventory cycle time in months?

A) Around 0.2

B) Around 0.4

C) Around 0.6

D) Around 0.8

E) Around1

F) None of the above

Name: TOTAL POINTS:

10/21/2020 Due by Nov 6, 2020, Friday at 5 pm (CT)

Q13. (10 pts.) Reconsider the Q12, which of the followings show the total annual fixed cost of inventory?

A) Around $500

B) Around $800

C) Around $1600

D) Around $1400

E) Around $700

F) None of the above