fm28 7 - = 0.2($200(500/2 $1,000(5,000/500 = $40(250...

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Now, solving for Q, we obtain: . ) P )( C ( ) S )( F ( 2 EOQ Q ) P )( C ( ) S )( F ( 2 Q Q ) S )( F ( 2 ) P )( C ( 2 2 = = = = d. What is the EOQ for custom microchips? What are total inventory costs if the EOQ is ordered? Answer: EOQ = ) P )( C ( ) S )( F ( 2 = ) 200 ($ 2 . 0 ) 000 , 5 )( 000 , 1 ($ 2 = 000 , 250 = 500 units. When 500 units are ordered each time an order is placed, total inventory costs equal $20,000: TIC = CP(Q/2) + F(S/Q)
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Unformatted text preview: = 0.2($200)(500/2) + $1,000(5,000/500) = $40(250) + $1,000(10) = $10,000 + $10,000 = $20,000. Note that the average inventory of custom microchips is 250 units, and that 10 orders are placed per year. Also, at the EOQ level, total carrying costs equal total ordering costs. Mini Case: 28 - 7...
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