Week 3 - EOQ Activity.xlsx - Economic Order Quantity Demand = Cost per item = \$ A= \$ B= \$ C= EOQ value = \$ EOQ units = 10,000 Annual Requirements or

# Week 3 - EOQ Activity.xlsx - Economic Order Quantity Demand...

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Economic Order Quantity Demand = 10,000 Annual Requirements or Demand Cost per item = \$ 150.00 Purchase cost per Unit A = \$ 1,500,000 Annual Usage, in dollars B = \$ 125.00 Administrative costs per order of placing the order C = 28% Carrying costs of the inventory (expressed as an annual percentage EOQ value = \$ 36,596.25 (exact value) EOQ units = 244.000 (rounded number) Using this inventory management system, every time that you need to order this item, you buy EXTRA: What if your supplier requires you to purchase only in Cases of 60 units each? How much extra Hint -- use the the table on the "Chart data" tab for the computation of "Total Annual Cost" for 240 (150*.28)/2 = 5040 10000 *125/240 = 5208 244 (150*.28)/2 = 5124 10000 *125 /250 = 5000 When to order is another question…. See the next assignment to compute the Reorder Point.
e of the inventory dollar value)y EOQ of them!a would this cost in a year?r your EOQ and the best Case Lot.\$40,000 \$50,000 \$60,000 Inventory Costs
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