M2_EOQ_Problem

M2_EOQ_Problem - Module 2 - Problem Set A certain store...

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Module 2 - Problem Set Module 2 - Problem Set A certain store sells Sun Devil Baseball Caps (Style 101). They sell, on average, 90 of those caps per week during their 52 week fiscal year. The Unit cost for a cap is $11.70. All ordering costs, transportation, tracking, processing, stocking, etc. amounts to $54 per order. Annual holding costs are 27% of the unit cost.
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Use this formula: TC = DC + (Q/2) h + (D/Q) K FIRST, find these givens: D = Annual Demand for Item C =Cost per Unit (to company keeping Inventory) h = Annual holding Cost per unit Cost of Holding 1 Unit of Inv. For 1 year K = Cost to Place One Order Total Annual Inventory Cost Equation
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Module 2 - Problem Set They sell, on average, 90 of those caps per week during their 52 week fiscal year. D = 90 * 52 = D = 4680 caps The Unit cost for a cap is $11.70. C = $11.70 All ordering costs, transportation, tracking, processing, stocking, etc. amounts to $54 per order. K = $ 54.00
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This note was uploaded on 10/14/2008 for the course SCM 300 taught by Professor D during the Fall '07 term at ASU.

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M2_EOQ_Problem - Module 2 - Problem Set A certain store...

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