{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Economic Order Quantity - AnnualDemand=50,000spools...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Economic Order Quantity Nov. 13, 2008 Annual Demand = 50,000 spools Cost per Spool = $75.00 Cost to Place an order = $25.00 Annual Cost to Carry Inventory = 12% Arbitrary Decision: Order quarterly (every 3 months, 12,500) Arbitrary Decision If he orders quarterly (12,500), what is the annual costs? Cost of spools = 50,000 x $75 =  $3,750,000 Cost to order = 4 x $25 =                        100 Cost to Carry Inventory = 6250 x 0.12 x 75 = 56,250 $3,806,350 Avg. Inv. (12500 + 0)/2 = 6250
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}