The company ABC stocks and sells a product EEKY34. The marketing manager estimates that the annual...

 

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The company ABC stocks and sells a product "EEKY34". The marketing manager estimates that the annual demand is 1,520,000 units. The costs associated with making an order for this product are about $1,200 per order. The supply chain manager estimates that the costs carrying one unit of the product in inventory are approximately $0.10 per year. Customer demand for the product is reasonably constant over time. When an order is placed to a supplier, the entire order is immediately delivered to company ABC. Company ABC operates 360 days a year. Determine the following: a) Optimal order quantity per order; b) Total annual inventory costs; c) Optimal number of orders to place each year; d) Number of operating days between orders, based on the optimal ordering. The company ABC stocks and sells a product "EEKY34". The marketing manager estimates that the annual demand is 1,520,000 units. The costs associated with making an order for this product are about $1,200 per order. The supply chain manager estimates that the costs carrying one unit of the product in inventory are approximately $0.10 per year. Customer demand for the product is reasonably constant over time. When an order is placed to a supplier, the entire order is immediately delivered to company ABC. Company ABC operates 360 days a year. Determine the following: a) Optimal order quantity per order; b) Total annual inventory costs; c) Optimal number of orders to place each year; d) Number of operating days between orders, based on the optimal ordering.

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A Economic Optimal order quantity EOQ 2Annual demandordering ... View the full answer