Question

is the ROP greater than the EOQ? How should this situation be handled?

is the ROP greater than the EOQ? How should this situation be handled?
Math   Statistics-And-Probability   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

ROP = Reordering Point
EOQ = Economic Order Quantity

Yes.ROP can be greater than EOQ.

the EOQ is the ideal amount to reorder, so if the ROP is higher you will be carrying excess inventory.

The reason why the ROP is larger than EOQ is that monthly change in demand.

For example, An forecast for 2019 January was that demand is only 10.but in may demand will go to 100.also since the first 3 months has a demand less than the EOQ excess stock should present on each time they reorder which would close the ap of lead time and deliver their product to their customers on time & on budget.

I would recommend keeping 10% extra inventory to keep up and with customer demand & improve customer satisfaction.

By doing so this should solve the problem of ROP larger than EOQ.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
As per the theory of EOQ procurement, orders for replenishments should be made exactly when the...
As per the theory of EOQ procurement, orders for replenishments should be made exactly when the inventory levels fall from peak inventory to the re-order point (ROP). What will happen if this guideline is ignored – if orders are placed earlier or later than this event? Use appropriate sketches to support your answer.
Research a specific situation which occurred at a company in which communication was handled either very...
Research a specific situation which occurred at a company in which communication was handled either very well or very poorly. You can select any company from any time frame and any situation which serves as a prime example of how communication should or should not be handled in business. The situation can involve communication between management, employees, customers, or clients. Although it is not required, it is recommended to run your topic selection through the instructor to ensure your presentation...
Explain how, and why, depreciation should be handled in incremental analysis.
Explain how, and why, depreciation should be handled in incremental analysis.
Solve in ExcelQM Barbara Bright is the purchasing agent for West Valve Company. West Valve sells...
Solve in ExcelQM Barbara Bright is the purchasing agent for West Valve Company. West Valve sells industrial valves and fluid control devices. One of the most popular valves is the Western, which has an annual demand of 4,000 units. The cost of each valve is $90, and the inventory carrying cost is estimated to be 10% of the cost of each valve. Barbara has made a study of the costs involved in placing an order for any of the valves...
Explain how Mail should be handled in a medical office steps and mail marked urgent !...
Explain how Mail should be handled in a medical office steps and mail marked urgent ! Systems that ensure mail is all distributed properly in the medical office ?
Should the energy of enzyme-substrate binding be greater than, less than, or equal to the energy...
Should the energy of enzyme-substrate binding be greater than, less than, or equal to the energy of enzyme-transition-state binding (ΔGb‡) in order for the reaction to proceed? and why?
How is the EOQ important and how do you use it? In other words, what does...
How is the EOQ important and how do you use it? In other words, what does the EOQ tell us, what is the overall objective of the EOQ, and how can an organization use it to help manage their inventory?
why should you not use the EOQ without additional consideration in real life situations
why should you not use the EOQ without additional consideration in real life situations
Apply the EOQ model to the following quantity discount situation in which D = 450 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. ____
Apply the EOQ model to the following quantity discount situation in which D = 530 units...
Apply the EOQ model to the following quantity discount situation in which D = 530 units per year, Co = $43, and the annual holding cost rate is 30%. Discount Category Order Size Discount (%) Unit Cost 1 0 to 99 0 12 2 100 or more 4 11.52 What order quantity do you recommend? If required, round your answer to two decimal places
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT