SCM 341 Essentials of Operations Management Third Examination - Problems

Name: Student Number:

41. 10 Points An office equipment dealer expects to purchase and sell 12,000 point-of-sale systems in the coming twelve months. The systems are purchased for $1,200 per unit and have an annual carrying cost of 2% of the purchase price. The companys ordering cost is estimated to be $30 per order. The dealer operates 240 days per year.

a. Using the Basic EOQ Model, what is the wholesalers optimal order quantity? Show Work in box and round answer to whole units.

b. How many times per year will the wholesaler place an order for flashlights? Show Work in box and round answer to one decimal point.

c. What is the length of time of the wholesalers order cycle for those flashlights? Show Work in box and round answer to one decimal point.

d. What is the total annual cost to the wholesaler if the optimal quantity is ordered? Show work in box and round answer to whole number.