Smith's Florist popular flower bouquet has a weekly demand of 40 units. Each bouquet is sold...
Smith's Florist popular flower bouquet has a weekly
demand of 40 units. Each bouquet is sold for $100. The ordering
cost is $60 per order. The carrying cost is 30% of the selling
price per unit per year. The store operates 50 weeks a year.
Required:
i. Compute the Economic Order Quantity (EOQ)
ii. What is the total annual carrying cost this year?
iii. What is the time between orders (i.e. length of an order
cycle) in weeks using EOQ.
Homework Answers
![i) Economic order quantity-Square Root [(2* Annual Demand Cost per order)/Carrying cost] Economic order quantity-Square Root [(215040)*60)/(100130%) Economic order quantity Square Root [240000/30] Economic order quantity Se Root [8000] Economic order quantity - 89.44 Units ii) Total annual carrying cost this year-(Annual Demand/2) Cost per order Total annual carrying cost this year- (50*40)/2) 30 Total annual carrying cost this year- s 30,000/. iii) No of orders per year-(5040/89.44 No of orders per year -22.36 Order cycle time is-No of weeks/No of order per week Order cycle time is -(50/22.36135957) Order cycle time is -2.236 Weeks](http://img.homeworklib.com/questions/66103e20-449a-11ea-a1fe-053c33146f37.png?x-oss-process=image/resize,w_560)
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Smith's Florist popular flower bouquet has a weekly demand of 40 units. Each bouquet is sold...
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