SCM 300 Lab #1 Answers
Q1. What is the annual demand for one store? Find D:
7800
Q2. What is the per unit annual holding for one store? Find H:
$113.75
Q3. What is the per unit cost for each item? Find C:
325
Q4. What is the cost to place one order? Find S:
950
Q5. What is the weekly demand? Find D/52:
150
Q6. How many orders per year are being placed annually? Q=900:
8.67
Q7. What is the annual cost to purchase the items? Q=900:
$2,535,000
Q8. What is the annual ordering cost, AOC? (Q=900):
8,233
Q10. What is the total annual cost of inventory, TC? (Q=900):
$2,594,000
Q11. What is the EOQ?:
361
Q12. Using the calculated EOQ, how often will orders be placed? All answers are in
weeks:
2.41
Q14. Using the calculated EOQ, what is the annual ordering cost (AOC)?:
$20,529

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