Which one of the following is incorrect? 1) The formula for the EOQ (Economic Order Quantity)...
Which one of the following is incorrect?
1) The formula for the EOQ (Economic Order Quantity) is the square root of a fraction, whose numerator is twice the product of the annual item demand and the cost per order, and whose denominator is the product of the unit price and the annual carrying rate.
2) Annual ordering cost is the EOQ multiplied by variable ordering cost.
3) Average inventory on hand is the order size multiplied by half.
4) Annual carrying cost is the average inventory on hand multiplied by the total cost.
Homework Answers
The answer is point 3.
Formula of EOQ is the square root of a fraction, whose numerator is twice the product of the annual item demand and the cost per order, and whose denominator is the product of the unit price and the annual carrying rate.
Annual ordering cost is the number of orders (EOQ) multiplied by ordering cost.
Annual carrying cost = Avg inventory * Inventory carrying cost (%)
Whereas, Average Inventory on hand is (Opening balance + Closing balance of inventory)/2
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Which one of the following is incorrect?
1) The formula for the EOQ (Economic Order Quantity)...
"Peterson Enterprises uses a fixed order quantity inventory control system. The firm operates 50 weeks per...
"Peterson Enterprises uses a fixed order quantity inventory control system. The firm operates 50 weeks per year and has the following characteristics for an item: Demand = 50,000 units/year, Ordering cost = $35/order, Inventory-carrying or holding cost as a percent of item value = 25%, Item (Unit) cost = $8 calculate the economic order quantity (EOQ) that is the Square Root (2 * Demand * Ordering cost)/Square root (holding cost * unit cost)"
Question 4 A company carries 10 items in stock, each with an economic order quantity of...
Question 4 A company carries 10 items in stock, each with an economic order quantity of $20,000. Through a program of component standardization, the 10 items are reduced to 5. The total annual demand is the same, but the annual demand for each item is twice what it was before. In Chapter 10, we learned that the economic order quantity varies as the square root of the annual demand. Since the annual demand for each item is now doubled, calculate:...
The economic order quantity (EOQ) model is a classical model used for controlling inventory and s...
The economic order quantity (EOQ) model is a classical model used for controlling inventory and satisfying demand. Costs included in the model are holding cost per unit, ordering cost, and the cost of goods ordered. The assumptions for that model are that only a single item is considered, that the entire quantity ordered arrives at one time, that the demand for the item is constant over time, and that no shortages arc allowed. Suppose we relax the first assumption and...
Problem 13-9 The Economic Order Quantity (EOQ) model is a classical model used for controlling in...
Problem 13-9 The Economic Order Quantity (EOQ) model is a classical model used for controlling inventory and satisfying demand. Costs included in the model are holding cost per unit, ordering cost and the cost of goods ordered. The assumptions for that model are: only a single item is considered; the entire quantity ordered arrives at one time; the demand for the item is constant over time; no shortages are allowed Suppose we relax the first assumption and allow for multiple...
The Economic Order Quantity (EOQ) model is a classical model used for controlling inventory and satisfying...
The Economic Order Quantity (EOQ) model is a classical model used for controlling inventory and satisfying demand. Costs included in the model are holding cost per unit, ordering cost and the cost of goods ordered. The assumptions for that model are that only a single item is considered, that the entire quantity ordered arrives at one time, that the demand for the item is constant over time, and that no shortages are allowed. Suppose we relax the first assumption and...
In the Quantity Discount EOQ inventory model, which of the following items is NOT considered relevant...
In the Quantity Discount EOQ inventory model, which of the following items is NOT considered relevant in determining the lowest cost order quantity? A. The cost of placing an order. B. The individual purchase price of an item of inventory. C. The cost of carrying an item in inventory. D. The variability of demand during lead time. E. The annual demand for the product.
3. Calculate the Economic Ordering Quantity (EOQ) model Aa Aa Inventory costs can be categorized as...
3. Calculate the Economic Ordering Quantity (EOQ) model Aa Aa Inventory costs can be categorized as the costs associated with holding the inventory, ordering and receiving the inventory, or running out of the inventory. For example, costs are the direct and indirect costs of keeping inventory on hand. carrying ordering The number of units in the optimal size order is called the economic ordering quantity (EOQ). Jones Company purchases custom-made durable packing boxes to ship its equipment. Each year, Jones...
Jony furniture store examines its inventory policy and considers using an economic order quantity (EOQ) approach....
Jony furniture store examines its inventory policy and considers using an economic order quantity (EOQ) approach. They have the following information about a table set: Annual demand Current order quantity Carrying cost Order cost 3,920 sets 80 sets $80.00/set/year $200 a. What is the current total annual cost (TC)? (5 points) b. What is the economic order quantity (EOQ)? [5 points) c. What is the total annual cost at the economic order quantity (EOQ)? [5 points)
CHAP 15 - Q13 DROPDOWN OPTIONS ARE BELOW THIS 13. Calculate economic ordering quantity (EOQ) Inventory...
CHAP 15 - Q13
DROPDOWN OPTIONS ARE BELOW THIS
13. Calculate economic ordering quantity (EOQ) Inventory costs can be categorized as the costs incurred for holding the inventory, the costs of ordering and receiving the inventory, and the cost of running out of inventory. costs are the direct and indirect costs of keeping inventory on hand. The number of units in the optimal size order is called the economic ordering quantity (E0Q). Murphy Company purchases custom-made durable packing boxes to...
Consider the following information about an end-product item: Ordering cost =$45/order Average usage =12 units/week Inventory...
Consider the following information about an end-product item: Ordering cost =$45/order Average usage =12 units/week Inventory carrying cost =$1/unit/week (a) How many orders should we place per year (52 weeks) to replenish inventory of the item based on average weekly demand? (b) Given the following time-phased net requirements from an MRP record for this item, determine the sequence of planned orders using economic order quantity (EOQ) and periodic order quantity (POQ) procedures. Assume lead time equals zero and current on-hand...
Question 4 A company carries 10 items in stock, each with an economic order quantity of $20,000. Through a program of component standardization, the 10 items are reduced to 5. The total annual demand is the same, but the annual demand for each item is twice what it was before. In Chapter 10, we learned that the economic order quantity varies as the square root of the annual demand. Since the annual demand for each item is now doubled, calculate:...
The economic order quantity (EOQ) model is a classical model used for controlling inventory and satisfying demand. Costs included in the model are holding cost per unit, ordering cost, and the cost of goods ordered. The assumptions for that model are that only a single item is considered, that the entire quantity ordered arrives at one time, that the demand for the item is constant over time, and that no shortages arc allowed. Suppose we relax the first assumption and...
Problem 13-9 The Economic Order Quantity (EOQ) model is a classical model used for controlling inventory and satisfying demand. Costs included in the model are holding cost per unit, ordering cost and the cost of goods ordered. The assumptions for that model are: only a single item is considered; the entire quantity ordered arrives at one time; the demand for the item is constant over time; no shortages are allowed Suppose we relax the first assumption and allow for multiple...
3. Calculate the Economic Ordering Quantity (EOQ) model Aa Aa Inventory costs can be categorized as the costs associated with holding the inventory, ordering and receiving the inventory, or running out of the inventory. For example, costs are the direct and indirect costs of keeping inventory on hand. carrying ordering The number of units in the optimal size order is called the economic ordering quantity (EOQ). Jones Company purchases custom-made durable packing boxes to ship its equipment. Each year, Jones...
Jony furniture store examines its inventory policy and considers using an economic order quantity (EOQ) approach. They have the following information about a table set: Annual demand Current order quantity Carrying cost Order cost 3,920 sets 80 sets $80.00/set/year $200 a. What is the current total annual cost (TC)? (5 points) b. What is the economic order quantity (EOQ)? [5 points) c. What is the total annual cost at the economic order quantity (EOQ)? [5 points)
CHAP 15 - Q13
DROPDOWN OPTIONS ARE BELOW THIS
13. Calculate economic ordering quantity (EOQ) Inventory costs can be categorized as the costs incurred for holding the inventory, the costs of ordering and receiving the inventory, and the cost of running out of inventory. costs are the direct and indirect costs of keeping inventory on hand. The number of units in the optimal size order is called the economic ordering quantity (E0Q). Murphy Company purchases custom-made durable packing boxes to...
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