SEMINAR ACTIVITY #$9-$ INVENTORY

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Question $6(5$ points$)$

Amalgamated Metal Machining Ltd uses massive quantities of industrial lubricants. The purchasing department is given the following information. The annual demand is $50,000$ cases of lubricant. The lubricant costs $$90$ per case. The holding cost has been determined to be $$8$ per case per year and it costs $$11\mathrm{.}00$ to process a purchase order.

a$.$ Calculate the economic order quantity for the cases of lubricant.

b$.$ What does this EOQ number mean

c$.$ Calculate the annual Set up Cost.

d$.$ Calculate the annual cost for Holding the inventory.

e$.$ Calculate the total cost of ordering. Explain what this number means.

Blank # $1$

A

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A

A

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A

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A$)$