Question

QUESTION 9 A local retailer purchased Inventory from som show anual demand (D) 2010 units, ordering 42 do wg Inventory of the material for How many orders will the place in one Demand 28.809 unit per year ordering cost 542 per order holding cost 54 per unit per year Excel Access

Answer 1

Annual demand (D) = 28,809 units

Ordering cost per order (S) = $ 42

Holding cost per unit per year (H) = $ 4

Economic Order Quantity = EOQ

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

$EOQ =\sqrt{\frac{2X28809X42}{4}}$

EOQ = 777.8104 units

Number of orders placed in a year = D/ EOQ

Number of orders placed in a year = 28,809 / 777.8104

Number of orders placed in a year = 37.04

Number of orders placed in a year = 37 (rounded off)

Therefore, number of orders placed in a year = 37