Score: 0 of 24 pts 2 of 4 (1 complete) Hw Score: 25%, 20 of 80 p Problem 12.15 Q

Question

Score: 0 of 24 pts 2 of 4 (1 complete) Hw Score: 25%, 20 of 80 p Problem 12.15 Question Help Joe Henry's machine shop uses 2.460 brackets during the course of a year. These brackets are purchased from a supplier 90 miles away. The following information is known about the brackets Annual demand Holding cost per bracket per year Order cost per order Lead time Working days per year 2.460 $1.35 $18.50 2 days 250 a)What is the EOQ? 259.67 units (round your response to two decimal places). b)What is the average inventory if the Eoas used? units (round your response to two decimal places) What would be the annual inventory holding cost? $ (round your response to two decimal places.

Explanation / Answer

Q = (2CD/h)

Q=Economic order quantity

C=COST PER ORDER =$18.50

D=ANNUAL DEMAND=2460

h =holding cost=$1.35

a) Q = (2x18.5x2460/1.35)=259.66 or 260

b) Average inventory = EOQ/2=260/2=130

c) Annual inventory hold cost=Average inventory x holding cost=130 x 1.35=175.5

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