MANAGEMENT
Unit 12 Homework 12.13

# Unit 12 Homework 12.13 - Homework 12.13 a EOQ =(2(2500 x...

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Homework 12.13 a) EOQ = √((2(2500) x 18.75)/\$1.50) = √(93,750/\$1.50) = √(62,500) = 250 units The economic order quantity is 250 units. b) Average inventory = 250 / 2 = 125 units Annual inventory holding cost = 125 * \$1.5 = \$187.50 c) Number of orders per year = 2,500 / 250 = 10 orders per year
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Unformatted text preview: Annual order cost = 10 * \$18.75 = \$187.50 d) Total annual cost of managing inventory = \$187.50 +\$187.50 = \$375 per year e) Time between orders = 250 / 10 = 25 days f) Reorder point = 10 * 2 = 20 units...
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• Fall '15
• JerrineBaker
• Management, total annual cost, Holding cost, annual inventory holding

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