For supply item MT, Bluesky Company has been ordering 150 units based on the rec
ID: 2354766 • Letter: F
Question
For supply item MT, Bluesky Company has been ordering 150 units based on the recommendation of the salesperson who calls on the company monthly. The company has hired a new purchasing agent, who wants to start using the economic-order-quantity method and its supporting decision elements. She has gathered the following information: Annual demand in units 300 Days used per year 300 Lead time, in days 20 Ordering costs $125 Annual unit carrying costs $25 Determine the EOQ, average inventory, orders per year, average daily demand, reorder point, annual ordering costs, and annual carrying costsExplanation / Answer
SIMILAR ONE PLEASE RATE
Q)For supply item HM, Bertha Company has been ordering 130 units based on the recommendation of the salesperson who calls on the company monthly. A new purchasing agent has been hired by the company who wants to start using the economic-order-quantity method and its supporting decision elements. She has gathered the following information:
Annual demand in units
500
Days used per year
500
Lead time, in days
30
Ordering costs
$125
Annual unit carrying costs
$20
Determine the EOQ, average inventory, orders per year, average daily demand, reorder point, annual ordering costs, and annual carrying costs.
Dear Friend,
EOQ=(2 x500 x125/20)^0.50 = 79.05 Units
Average Inventory=79.05/2 = 39.525 / 40 units (rounded off)
Orders Per Year=500/79 = 6.33 or 6 (Rounded off) Orders Per year
Average Daily Demand=500/500 =1 unit
Reorder Levels=1 x 30 = 30 units
Annual Ordering Costs = 6.33 x 125 = $791
Annual Carrying Costs=39.525 x 20 = $791
I am sure this would help...