Question: Using EOQ MODEL WITH SHORTAGES please solve the situation( explain it in Excel Form with formula) IVA is a local distributor of AWESOME 25 WG

Using EOQ MODEL WITH SHORTAGES please solve the situation( explain it in Excel Form with formula)

IVA is a local distributor of AWESOME 25 WG (Thiamethoxam) supplied by Shandong Weifang Rainbow Chemical Co., Ltd.mwherein its formulation plant is located in Shandong China. Sometimes, shortages occur for this product due to delayed production of its raw materials. The company wants to determine the optimal order size and total inventory cost for the product given an estimated annual demand of 12,000 L, an annual carrying cost of Php 50 per Liter, an ordering cost of Php 10,000 and a shortage cost of Php 120/L per year.

The Supply Chain department also wants to find out the Shortage Level, Number of Orders, Maximum Inventory Level,

Time between orders, Time during which inventory is on hand and the Time during which there is a shortage.

The company office is open at a total of 264 days in a year.

Given:

Demand (D)

12000

L

Carrying Cost (Cc)

50

Php/L

Ordering cost (Co)

10000

Php

d=Demand/264 days

45.4545

L/day

Shortage Cost (Cs)

120

Php/L

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