1. The uganda supplier of electric bicycle - "Airliftt" imposes a fixed ordering cost of $120 per order, regardless of the order quantity. Young Lee has estimated the inventory holding cost for electric bicycle - "Airliftt" to be $8 per bike per year. Annual demand is 2186 pcs.

Using the EOQ model, what is the optimal order quantity for "Airfit" in 2015? Round up your answer to the nearest integer. What is the annual total inventory cost in this case?

Apart from the historical demand data, Joel has also collected the following data for " lenses":

• Fixed ordering fee of $150 per order imposed by the Jamaica manufacturer;
• Holding cost estimated at $30 per unit per year.
• Replenishment lead-time estimated to be 4 weeks on average.
• SuperLens operates 50 weeks per year
• Current desired customer service level is 95%
• Annual demand is 3170 pcs and weekly standard deviation is 4.77pcs

In this case,

1. What safety factor should be used by Joel?
2. What is the Economic Order Quantity (EOQ)?
3. What is the recommended level of safety stock?
4. What is the reorder point to set if taking into account the safety stock?
5. What is the total inventory cost per year?

Answer rating: 100% (QA)

Airliftt Electric Bicycle EOQ Calculation 2015 Given Ordering cost So 120 per order Holding cost H 8 ... View the full answer