Question

Question 22 3 points Anlarge auto repair shop has been purchasing windshields for the cars at the rate of 20 windspor order the fomestimates that carrying for hig) is $20 per year, and that cedering cookies about $270 per onder The current price of each windshield $700 The actions of the base o modely or what an emand (0) is the current action optimal? unts per oder holding cost lorder cout productos 250 units 20 per un per year $270 perder 5200 per un Excel Access

Answer 1

Units per Order = EOQ = 250 units

Holding cost = H = $20

Order Cost = S = $270

Annual Demand = D

We know,

EOQ = $\sqrt{\frac{2*D*S}{H}}$

250 = $\sqrt{\frac{2*D*270}{20}}$

250*250 = 27*D

D = 2314.81

Answer: For Annual Demand of 2314.81, the current Ordering policy is optimal.

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