Angel a Rodriguez, manager of a large medical supply house that operates 50 week
ID: 357707 • Letter: A
Question
Angel a Rodriguez, manager of a large medical supply house that operates 50 weeks per year and 5 days per to implement a periodic review system for all class A items. One such item has the following characteristi week, has dedided . Demand 12,000 units / year (or 48 units per workday) Order cost $35/order Holding cost $10/ unit / year If Rodriquez wishes to minimize total cost (thereby approximating the EOO) what should be P, the number of workdays between orders? O a) greater than 7 days but less than or equal to 9 days Ob) greater than 9 days but less than or equal to 11 days c) less than or equal to 7 days d) greater than 11 daysExplanation / Answer
Given are the following data :
Annual demand = D = 1200O UNITS
Order cost = Co -= $35 per order
Annual unit holding cost = Ch = $ 10 per unit per year
Therefore , Economic Order Quantity ( EOQ )
= Square root ( 2 x Co x D / Ch )
= Square root ( 2 x 35 x 12000/ 10 )
= 289.82 ( 290 rounded to nearest whole number )
EOQ = 290
Number of days in a year as per given data =5 days/ week x 50 week = 250 days
The number of workdays between orders
= EOQ/Annual demand x Number of workdays in a year
= 290 / 12000 x 250
= 6.041
NUMBER OF WORKDAYS BETWEEN ORDERS = 6.041 DAYS
Therefore , correct answer is : C) LESS THAN OR EQUAL TO 7 DAYS “
ANSWER : C ) LESS THAN OR EQUAL TO 7 DAYS
ANSWER : C ) LESS THAN OR EQUAL TO 7 DAYS