You are responsible for managing the inventory of SKU #13229, a children's tablet computer. You currently...

 

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You are responsible for managing the inventory of SKU #13229, a children's tablet computer. You currently purchase an annual 2,000 units of this item from a supplier. The holding cost per unit per year is equal to $76 (the inventory holding cost factor is 20% and the unit cost is $380), and the cost of placing an order is $392. What is the economic order quantity for SKU #3229? How many orders will be placed over the course of a year? The purchasing manager has been negotiating with the supplier, and the latter has agreed to the following terms: Lower order placement costs ($60 instead of $392) and higher unit costs ($384 instead of $380). Do you think this a good deal? Why or why not? You are responsible for managing the inventory of SKU #13229, a children's tablet computer. You currently purchase an annual 2,000 units of this item from a supplier. The holding cost per unit per year is equal to $76 (the inventory holding cost factor is 20% and the unit cost is $380), and the cost of placing an order is $392. What is the economic order quantity for SKU #3229? How many orders will be placed over the course of a year? The purchasing manager has been negotiating with the supplier, and the latter has agreed to the following terms: Lower order placement costs ($60 instead of $392) and higher unit costs ($384 instead of $380). Do you think this a good deal? Why or why not?

Answer rating: 100% (QA)

1 The economic order quantity EOQ can be calculated using the formula EOQ sqrt2DSH where D is the an... View the full answer