Question

MATERIALS Units normally required annually Cost per onder Annual carrying cost Lead time normal daly used maximun daily uses 730 10 12 40 s days (round to the nearest whole umber The most economical order quantity is 10 A 2 annual.required.units carrying cost cost per order 12 20 C 41 for any following problems 35 Disregard your answer in # 9 Use economic quantity of Number of orders per year 1 10 A Total units required Economic order quantity 21 146 D (Disregard any previous answer. Use orders per year cost Annual ordering 11 3 A Orders per year Cost per order х B C 27 include safety stock 12 Reorder point Normal Useage Lead Time X 10 Normal Useage Maximum Useage Lead Time 50 60 2 pt ea COST BEHAVIOR TCHING ch the letter that corresponds with your choice Тхed One answer each ariable Direct labor for factory Rent on factory building Cost accountant salary $ 3 per hour 328 per year 58 per month

Answer 1

9. Solution: The correct option is “A” i.e 10

Explanation:

Economic Order Quantity=Square root of {(2*Annual Demand*Ordering Cost per order)/Carrying cost per unit}

=Square root of (2* 730 units*$ 3 per order)/$ 40 per order

=Square Root(109.5)=10.46 approx=10

10. Solution: The correct option is “B” i.e 21

Explanation:

Number of orders per year=Total units ordered/Economic Order Quantity

=730 units/35 units=20.86 orders=21 orders