Question: The following basic information is provided and applies to both questions below. Currently, the annual demand for a product is 1000 units, the setup (i.e.,

The following basic information is provided and applies to both questions below. Currently, the annual demand for a product is 1000 units, the setup (i.e., ordering cost) per order is $45, and the holding cost is 80 cents per item per year.

(a) Compute EOQ(5) using the LONG method (by computing the expected demand and substituting in the EOQ formula) and compare to your answer obtained by the SHORTCUT method. Keep at least four places of decimal in your calculations (you can keep 2 places for the calculated EOQ).

(b) Compute the Total Cost corresponding to the EOQ you compute.

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!

Start with the current EOQ using the basic information provided. Assume that demand grows by 5% each year for the next five years. Also assume that ordering cost falls by 7% each year and holding...

The following basic information is provided and applies to both questions below. Currently, the annual demand for a product is 1000 units, the setup (i.e., ordering cost) per order is $45, and the...

The following basic information is provided and applies to all questions below. Currently, the annual demand for a product is 1000 units, the setup (i.e., ordering cost) per order is $45, and the...

The following basic information is provided and applies to all questions below. Currently, the annual demand for a product is 1000 units, the setup (.e., ordering cost) per order is $45, and the...

BADM 7120: Operations Management Inventories with Probabilistic Demand Example Problem #2: A product with an annual demand of 1000 units has an ordering cost = $25.50 per order (Co or set-up cost, S)...

Please show step by step thanks 5. Using the appropriate model (EOQ or EPQ) answer the following questions: (10 points) a) In the basic EOQ model, if the cost of placing an order is reduced by half,...

PLEASE TYPE OUT ANSWERS Using the appropriate model (EOQ or EPQ) answer the following questions: (10 points) a) In the basic EOQ model, if the cost of placing an order is reduced by half, and all...

5. Using the appropriate model (EOQ or EPQ) answer the following questions: (10 points) a) In the basic EOQ model, if the cost of placing an order is reduced by half, and all other values remain...

5. Using the appropriate model (EOQ or EPQ) answer the following questions: a) In the basic EOQ model, if the cost of placing an order is reduced by half, and all other values remain constant, will...

Peters of Persia sells fabric to a wide range of industrial and consumer users. One of the products it carries is denim cloth, used in the manufacture of jeans and carry bags. The supplier for the...

A company just paid a dividend of $0.75. The dividend is expected to grow 2% per year forever. What is the price of the stock if investors require a 6% return? Show your work.

Go to the following website: http://phet.colorado.edu/en/simulation/moving-man. Click on the 4 button to start the simulation. You may need to install Java if your computer does not have it. 1. Go to...

12. Methanol, CH, OH, is manufactured from carbon dioxide and hydrogen. CO2(g) + 3H2(g) = CHOH(g) + HO(g) AH = -49 kJ/mol The reaction is carried out in the presence of a catalyst containing copper....

atch the compensation objectives with their meanings. Efficiency Efficiency drop zone empty. Fairness Fairness drop zone empty. Compliance Compliance drop zone empty. Improving performance and...