Prob 1. The following inventory data have been established for ABC Company ? 

Orders must be placed in multiples of 500 units ? 

Annual sales are 720,000 units ? 

Purchase price per unit from supplies is P14 ? 

Carrying cost is 30% of the purchase price of goods ? 

Fixed order cost is P236.25 

Required: 

a. Compute EOQ, total inventory costs.

b. Using a table calculate TOC and TCC under each of the following independent cases:

i. orders at EOQ 

ii. at 8,000 units order 

iii. at 10,000 units order 

Prob 2. Assume the following data (use 300 working days): 

Annual demand 78,000 units 

Carrying cost 25% of inventory value 

Purchase price P 3.84/unit 

Ordering cost P260 per order 

Safety stocks 1,800 units 

Delivery time 20 days 

Required: 

Compute EOQ, total inventory costs and re-order point.

Answer rating: 100% (QA)

Prob 1 EOQ 2 x 23625 x 720000 3 x 14 8900000 21 424285714 ... View the full answer