Question: QUESTION 11 1. Recall the example Book Store Mug Sales covered in class with the following parameters: -Demand is constant, at D=20 units a week

 QUESTION 11 1. Recall the example Book Store Mug Sales covered

QUESTION 11 1. Recall the example Book Store Mug Sales covered in class with the following parameters: -Demand is constant, at D=20 units a week -Fixed order cost of K=$12.00, no lead time Holding cost rate h is 25% of inventory value annually Mugs cost C=$1.00 each, sell for $5.00 each We used the EOQ formula and get the optimal order quantity to be Q=316 units. Please answer the following questions: [Note: Here, we only consider the total cost as the sum of the fixed ordering cost and inventory holding cost.] What is the total cost per week under this optimal Q ? What is the total cost per week if we order Q=300 each time instead? What is the total cost per week if we order Q=400 each time instead? During covid, placing an order becomes more costly and the fixed order cost becomes 4K. What is the optimal Q in this case? Following the previous question, this case, what is the total cost per week

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!