Question

QUESTION 26 A local retailer purchased inventory from an overseas supplier and believes the assumptions of the EOQ model are met reasonably well. Data from their accountant show annual demand (D) =19,951 units, ordering cost (S) - $42 per order, and holding cost (11) - 54 per unit per year How many times per year will she replenish her inventory of this material? (or 'How many orders will she place in one year?) Demand 19,951 unit per year ordering cost $42 per order holding cost $4 per unit per year Excel Access QUESTION 27 Northwestern Bells stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 38,744 units. Northwestern estimates its annual holding cost for this item to be $25 per unit per year. The cost to place and process an order from the supplier is $2.7. The company operates 300 days per year, and the lead time to receive an order from the supplier is 2 working days. What is the economic order quantity? Excel Access

Answer 1

26) Cliven, 19951 Annual demand (D) = Holding cost (H)= $4 Order cost co) = $42 Economic Order quantity (Eoq) 2 XDXO H 697.28 - EOQ 2X19951x42 » No 2 No. of ordeslyo = 19951 647.28 30-8 = 31 ordes lyr EoQ