Question

16) For supply item ABC, Andrews Company has been ordering 125 units based on the recommendation of the salesperson who calls on the company monthly. A new purchasing agent has been hired by the company who wants to start using the economic-order-quantity method and its supporting decision elements. She has gathered the following information:

Annual demand in units |
250 |

Days used per year |
250 |

Lead time, in days |
10 |

Ordering costs |
$100 |

Annual unit carrying costs |
$20 |

**Required:**

Determine the EOQ, average inventory, orders per year, average daily demand, reorder point, annual ordering costs, and annual carrying costs.

EOQ:

Average inventory:

Orders per year:

Average daily demand:

Reorder point:

Annual ordering costs:

Annual carrying costs:

Answer #2

answered by: anonymous

a company decides to establish an EOQ for an item. The annual
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inventory-carrying costs are $2 per unit per year. Calculate the
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c. $3,464,000
d. $2,987,400
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Question 3
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