This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Solution 12/8/12
Chapter: 28
Problem: 3
INPUT DATA:
Fixed order cost (F) $24
Annual unit sales (S) 338,000
Important note: Make your formulas refer to the cells in the input data section.
a. What is the EOQ?
EOQ = 5,200
b. How many orders should the firm place each year?
Optimal number of orders = 65
Total
The following inventory data have been established for the Alder Corporation:
(1) Orders must be placed in multiples of 100 units.
(2) Annual sales are 338,000 units.
Note: The red arrows in the upper right hand of a cell indicates a helpful comment. Click on the cell to see the comment.
c. At what inventory level should a reorder take place? [Hint: Reorder point = Safety Stock + (Weeks to deliver x Weekly usage)
- Goods in transit.
d. (4) The EOQ number of units.
d. Calculate the total costs of ordering and carrying inventories if the order quantity is:
d. (1) 4,000 units.
d. (2) 4,800 units.
d. (3) 6,000 units.
CP
FS2
EOQ =
e. (3) Purchase price increases to $4? Leave sales and fixed costs at original values.
e. (1) Sales increase to 500,000 units?
e. (2) Fixed order costs increase to $30 while sales remain at 338,000 units.
e. What are the EOQ and total inventory costs if
Trusted by Thousands of
Students
Here are what students say about us.
Resources
Company
Copyright ©2022 All rights reserved. | CoursePaper is not sponsored or endorsed by any college or university.