Problem 12.15 Question Help * Joe Henry\'s machine shop uses 2.460 brackets duri

Question

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$1.35 Order cost per order Lead time Working days per year 2.460 $18.50 2 days 250 a) What is the E00? 259.67 units (round your response to two decimal places) b)What is the average inventory the EOQ is used? 130 units (round your response to two decimal places what would be the annual inventory holding cost? 175 5jeound your response to two decinal-aces). 0

Explanation / Answer

a. EOQ = (2*annual demand* cost per order/holding cost)^0.5

= (2*2460*18.5/1.35)^0.5

= 259.66

b. Average inventory = EOQ/2 = 129.83 (answer in 2 decimal places)

Annual inventory holding cost = average inventory*holding cost per unit

= 259.66/2*1.35

= $175.27

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