Question

If D = 8 500 per month, S = $47 per order, and H = $2.00 per unit per month,

a) What is the economic order quantity?

The EOQ is units (round your response to the nearest whole number).

b) How does your answer change if the holding cost doubles?

The EOQ is units (round your response to the nearest whole number).

c) What if the holding cost drops in half? The EOQ is units (round your response to the nearest whole number).

Answer #1

Pam runs a mail-order business for gym equipment. Annual demand
for TricoFlexers is 24,000.
The annual holding cost per unit is
$3.25, and the cost to place an order is $67
a. What is the economic order quantity?
The EOQ is 995.
(Enter your response rounded to the nearest whole
number.)
b. Suppose demand for TricoFlexers doubles, to
48,000.
The EOQ for the new value of demand is
nothing.
(Enter your response rounded to the nearest whole
number.)
c. The...

William? Beville's computer training? school, in? Richmond,
stocks workbooks with the following? characteristics:
Demand D 19, 200 units/year
Ordering cost S ?$24?/order
Holding cost H ?
$4?/unit/year
?
?
?a) The EOQ for the workbooks is
?(round your response to the nearest whole? number).
?b) What are the annual holding costs for the? workbooks?
?(round your response to the nearest whole? number).
?c) What are the annual ordering? costs?
?(round your response to the nearest whole? number

Bell Computers purchases integrated chips at
$350350
per chip. The holding cost is
$3737
per unit per year, the ordering cost is
$119119
per order, and sales are steady at
395395
per month. The company's supplier, Rich Blue Chip
Manufacturing, Inc., decides to offer price concessions in order to
attract larger orders. The price structure is shown below.
Rich Blue Chip's Price Structure
Quantity Purchased
Price/Unit
1-99 units
$350
100-199 units
$325
200 or more units...

Apply the EOQ model to the following quantity discount situation
in which D = 450 units per year, Co =
$42, and the annual holding cost rate is 20%.
Discount
Category
Order Size
Discount
(%)
Unit Cost
1
0 to 99
0
$12.00
2
100 or more
3
$11.64
What order quantity do you recommend? If required, round your
answer to the nearest whole number.
____

Rambo Ltd. orders 500 units at a time, and places 30 orders per
year. Total ordering cost is $3,200 and total carrying cost is
$2,500. Which of the following statements is true?
Total inventory-related cost is lower than it would be at the
economic order quantity (EOQ).
The economic order quantity (EOQ) is 500.
The economic order quantity (EOQ) is less than 500.
The economic order quantity (EOQ) is more than 500.

Problem 10-21 (Algorithmic)
Apply the EOQ model to the following quantity discount situation
in which D = 450 units per year, Co =
$42, and the annual holding cost rate is 30%.
Discount
Category
Order Size
Discount
(%)
Unit Cost
1
0 to 99
0
$11.00
2
100 or more
2
$10.78
What order quantity do you recommend? If required, round your
answer to the nearest whole number.

Economic Order Quantity
Ottis, Inc., uses 731,025 plastic housing units each year in its
production of paper shredders. The cost of placing an order is $30.
The cost of holding one unit of inventory for one year is $15.
Currently, Ottis places 171 orders of 4,275 plastic housing units
per year.
Required:
1. Compute the economic order quantity.
units 1,710
2. Compute the ordering, carrying, and total
costs for the EOQ.
Ordering cost
$__________
Carrying cost
12,825
Total cost
$__________...

Global Manufacturing, Inc. currently begins each sales cycle with
168,758 units in stock. This stock is depleted at the end of each
sales cycle and then reordered. The firm currently places 4 orders
per year The carrying cost per unit is $0.611 per year and the
fixed order cost is $8,245 per order. Assuming there is
no shortage cost for this firm. The average cost of each
unit of inventory is $92.58.
DATA INPUT
Beginning inventory =
168,758
units
Ending inventory =...

The catering manager of LaVista? Hotel, Lisa? Ferguson, is
disturbed by the amount of silverware she is losing every week.
Last Friday? night, when her crew tried to set up for a banquet for
500? people, they did not have enough knives. She decides she needs
to order some more? silverware, but wants to take advantage of any
quantity discounts her vendor will offer.
For a small order ?(2,000 pieces or? less) her vendor quotes a
price of ?$1.80/piece.
If...

Demand for carpet at a carpet wholesaler stays constant at
10,000 sq. ft. per month. The wholesaler incurs a fixed
transportation cost of $100 each time an order is placed and
delivered. The carpet costs $3 per sq. ft. and the wholesaler has
an annual holding cost rate (per sq. ft.) that is 20% of the unit
purchase cost.
What should the optimal order size (or EOQ) be? Note that the
carpet can be ordered in any size, so there...

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