The following figure shows an Excel spreadsheet that compares total ordering and holding costs for some current order quantity to the same costs for the EOQ and calculates how much could be saved by switching to the EOQ. Re-create this spreadsheet in Excel. You should develop the spread sheet so that the results will be recalculated if any of the values in the highlighted cells are changed. Your for matting does not have to be exactly the same, but the numbers should be. (As a test, see what happens if you just change the annual demand and cost per order to 5,000 and $25, respectively. Your new EOQ should be 91.29, and the total savings under the EOQ should be $5,011.39.)

Transcribed Image Text:

A C E F 1 Calculating Savings under EOQ Annual demand: Annual holding cost, per unit: Cost per order: 3 4000 $30.00 $30.00 4 Current order quantity: Current annual holding cost: $7500.00 Current annual ordering cost: 7 500 8 $240.00 Total cost: $7740.00 9 10 11 Economic order quantity: EOQ annual holding cost: $1341.64 EOQ annual ordering cost: $1341.64 Total cost: $2683.28 12 89.44 14 15 16 17 Total savings under EOQ: $5056.72 18 ーN|m|す|n