Question

A product has a demand of 436 units per month. Ordering cost is $20, and holding cost is $4 per unit per year. The EOQ model is appropriate. The total management cost (holding and setup costs only) for this product will be per year. demand 436 per month order cost $20 per order holding cost $4 per unit per year Excel Access QUESTION 29 A drone company builds its own motors, which are then put into each drone. While the drone manufacturing process is continuous, the motors are intermittent flowe made when needed). Data on the manufacture of the motors appears below. Annual demand (D) = 54,579 units Daily subassembly production rate - 1.000 Setup cost() - $85 per batch Daily subassembly usage rate - 200 Carrying cost-$0.20 per unit per year Annual demand 54,579 units daily production rate 1000 unit per day daily subassembly usage rate 200 per day carrying cost $0.20 per unit per year Excel Access To minimize cost, how large should each batch (or lot) of motors be (what is Op')?

Answer 1

AS PER POLICY I AM ALLOWED TO ANSWER ONLY THE FIRST QUESTION

Q28

EOQ = (2* Demand* Ordering cost / Holding Cost) ^0.5 = ( 2*436*20/4)^0.5 = 66

Hence there are 436/66 = 6.7 = ~7 orders per year

Total Ordering cost = 7*20 = $140

Annual Holding cost = 4* 66/2 = 132

Therefore, total management cost = 140+132 = $272