ch06 - In-Class Assignment (EOQ)

# ch06 - In-Class Assignment (EOQ) - 3 What is the average...

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Operations Management - OPER1401 Name: E.O.Q. Assignment answer sheet Freda Blitz owns a fishing supply store. She sells 600 units of a popular fish finder each year. Each time she places an order it takes 10 days to arrive and costs her \$60. Her store is open 250 days per year. She carries inventory at a cost of \$20 per unit per year and currently she orders 50 units at a time. (please show your work) 1 What is the current total cost of ordering and carrying inventory for one year? 2 Determine the optimal / economic order quantity? Use the E.O.Q. to answer the following.
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Unformatted text preview: 3 What is the average inventory level? 4 What is the optimal number of orders per year? 5 How many days are there between orders? 6 What is the total inventory carrying and ordering cost? 7 What is the re-order point? 8 How much is saved per year by ordering the E.O.Q. amount? 9 If we take the savings from question # 8 (above) and apply that savings to 1000 inventory items, how much could we save in inventory ordering and holding costs . in one year?...
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