Question: The current order quantity for Electric Powerbars is 100 bars. The order cost is $10 per order, the holding cost is $0.25 per box per

The current order quantity for Electric Powerbars is 100 bars. The order cost is $10 per order, the holding cost is $0.25 per box per year, and the annual demand is 2,000 bars per year.
a. Calculate the annual holding cost plus the annual ordering cost to get the total annual cost when using an order quantity of 100 bars.
b. Calculate the EOQ and the total annual cost for this order quantity.
c. How many orders per year are necessary when Q = 100? How many orders per year are necessary for the EOQ in part b?
d. Graph the annual inventory cost (IC) using MS Excel. Show the holding cost, ordering cost, and total inventory cost as a function of order size Q.

Step by Step Solution

★★★★★

3.45 Rating (165 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Calculate the annual inventory cost based on this ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

792-B-M-L-S-C-M (4559).docx

120 KBs Word File

Students Have Also Explored These Related Management Leadership Questions!

The current order quantity for Paul's Pasta Pin-wheels is 200 boxes. The order cost is $4 per order, the holding cost is $0.40 per box per year, and the annual demand is 500 boxes per year. a....

A food processor uses approximately 27,000 non-returnable glass jars a month for its fruit juice product. Because of storage limitations, a lot size of 4,000 jars has been used. Monthly holding cost...

A bakery buys flour in 25- pound bags. The bakery uses 1,215 bags a year. Ordering cost is $ 10 per order. Annual carrying cost is $ 75 per bag. a. Determine the economic order quantity. b. What is...

The current order quantity for Electric Powerbars is 1 0 0 bars. The order cost is $ 1 0 per order, the holding cost is $ 0 . 2 5 per bar per year, and the annual demand is 2 , 0 0 0 bars per year. a...

The current order quantity for Electric Powerbars is 1 0 0 bars. The order cost is $ 1 0 per order, the holding cost is $ 0 . 2 5 per bar per year, and the annual demand is 2 . 0 0 0 bars per year. a...

The current order quantity for Electric power bars is 100 bars theorder cost is $10.00 per order, the holding cost is $.25 per bar per year, and the annual demand is 2000 bars per year . 1. Calculate...

1. Consider the below information with the simple Economic Order Quantity (EOQ) model: Annual Demand (D): 1,500 units Ordering Cost (S): $100 per order Holding Cost per item (H) : $5 per year (a)...

The current order quantity for Pasta wheels is 3 0 0 boxes. The order cost is $ 4 per order, the holding cost is $ 0 . 4 0 per box per year, and the annual demand is 6 0 0 boxes per year.Note: Round...

Consider the below information with the simple Economic Order Quantity ( EOQ ) model: Annual Demand ( D ) : 1 , 5 0 0 units Ordering Cost ( S ) : $ 1 0 0 per order Holding Cost per item ( H ) : $ 5...

4) Computing EOQ, TC, and Reorder Point 1. The following information is available on the inventory management of a popular mouthwash at Merkle Pharmacies: (1) Demand (and current order quantity) is 0...

How much work is done by a force F = (2x N)i + (3 N)i, with x in meters, that moves a particle from a position ri = (2 m)i + (3 m)j to a position rf = (4 m)i (3 m)j?

The ledger of Mai Company includes the following accounts with normal balances as of December 31: Common Stock $10,000; Dividends $1,300; Services Revenue $23,000; Wages Expense $13,400; and Rent...

16.29 What is the probability that the range of a random sample of size 30 includes at least 85% of the population?

Where in the batch program can you create new variables in SAS and Stata?

Discuss whether the EOQ model is still useful if a small error was made while estimating one of the cost parameters used in the EOQ computation.

Assume that you used the EOQ model to compute the order quantity for an item, and the answer was twenty units. Unfortunately, the minimum lot size for the item is twenty-four units. Discuss how this...

Explain whether the continuous review or periodic review inventory system is likely to result in higher safety stock. Which is likely to require more time and effort to administer? Why?

Consider the cash flows of a certain project given in Table P7.25. The project's i*s are computed as 10% and 100%, respectively. The firm's MARR is 8%. Show why this investment project fails the...

Question 1 Consider a $ 5 0 0 , 0 0 0 mortgage loan with 3 0 years of maturity and 7 % of interest rate ( monthly paid ) . What is the monthly payment on the mortgage? How much of the monthly payment...

Assume that you are on the financial staff of Vanderheiden Inc., and you have collected the following data: T he yield on the companys outstanding bonds is 7.75%, its tax rate is 40%, the next...