Given the following information, what is the Total Annual Cost when ordering and holding costs only are taken into consideration?
Annual Demand | 15,000 |
Order Quantity | 500 |
Order Cost | $30 per order |
Holding Cost | 20% per unit per year |
Unit Cost | 25 |
DEMAND = 15000
ORDERING COST = 30
HOLDING COST = 5
COST PER UNIT = 25
ANNUAL HOLDING COST = (EOQ / 2) * HOLDING COST = (500 / 2) * 5 =
1250
ANNUAL ORDERING COST = (DEMAND / EOQ) * ORDERING COST = (15000 /
500) * 30 = 900
TOTAL COST OF MANAGING = AHC + AOC = 1250 + 900 = 2150
Given the following information, what is the Total Annual Cost when ordering and holding costs only...
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