The Efficient of Economic Order Quantity allows firms to order the optimal i.e. maximum/minimum inventory. What...
The Efficient of Economic Order Quantity allows firms to order the optimal i.e. maximum/minimum inventory. What two critical components affect the EOQ?
Homework Answers
The formula for EOQ is
EOQ = sqrt(2DS/H)
Here D is the demand, S is the ordering cost, and H is the holding cost.
Considering that the demand is variable and external factor that cannot be controlled, there are only two other components that we can control as a firm. These are, ordering cost and holding cost.
Ordering cost refers to the various fixed cost that is incurred while ordering for a shipment. These may include the likes of shipping, booking, agent fee, etc. On the other hand, the holding cost is usually comprised of cost of warehouse and real estate, additional requirement (such as refrigeration), etc.
Thus the two critical components that affect the EOQ are ordering cost (S) and the inventory holding cost (H).
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The Efficient of Economic Order Quantity allows firms to order
the optimal i.e. maximum/minimum inventory. What...
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CHAP 15 - Q13
DROPDOWN OPTIONS ARE BELOW THIS
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The optimal order quantity after the change in pricing structure
is ________ units (enter your response as a whole number).
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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...
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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a) What is the optimal order quantity and the minimum annual
cost for Bell Computers to order, purchase, and hold these
integrated chips?
The optimal order quantity after the change in pricing structure
is ________ units (enter your response as a whole number).
The total annual cost for Bell computers to order, purchase, and
hold the integrated chips is $____________ (round your response to
the nearest whole number).
b) Bell Computers wishes to use a 10% holding cost rather than...
QUESTION 34 A economic order quantity problem (EOQ) has a daily demand rate = 10 (where demand is over every day of the years. The economic order for this problem is 491 units. What is the average inventory in this problem?
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