Question 1:

Part a.)

H&C evaluates EOQ quantity to equal 200 cases, but it chooses an order of quantity of 250 cases. Relative to the order quantity of 200 cases, the order quantity of 250 cases has

Higher ordering cost and higher holding cost

Higher ordering cost and lower holding cost

Lower ordering cost and higher holding cost

Lower ordering cost and lower holding cost

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Part b.)

The EOQ model discusses on the economics of scale to exploit the fixed cost. The fixed cost here is really about:

Labor cost

Holding Cost

Ordering cost

Material cost

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part c.)

H&C sells 600 bottles of a dietary supplement per week at $1000 per bottle. The supplement is ordered from a supplier who charges H&C $30 per order and $50 per bottle. H&Cs annual holding cost percentage is 40%. Assume H&C operates 50 weeks in a year. What is the H&Cs total ordering and holding cost per year if H&C orders 500 bottles at a time?

9562

12450

4832

6800