Homework (WK7)

Homework (WK7) - below, I added a program called MathType...

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Week 7 CH17, Pg 578, P3 Ray’s Satellite Emporium wishes to determine the best order size for its best-selling satellite dish (model TS111). Ray has estimated the annual demand for this model at 1,000 units. His cost to carry one unit is $100 per unit, and he has estimated that each order costs $25 to place. Using the economic order quantity (EOQ) model, how many should Ray order each time? On our OP Supply MGMT 12E DVD\media\excel\2003\ there is a file labeled as “Ch17_Inventory_Control_Template.xls”, I placed the numbers in and it automatically gave the answer, see be- low: Annual demand ( D ) 1000 Per Order cost ( S ) $25.00 Holding cost per unit per year ( H ) $100.00 Q opt = 23 I didn’t find the above method in actually learning anything. In order for me to understand the equation
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Unformatted text preview: below, I added a program called MathType 6, which is a powerful equation editor for windows. I believe to solve this problem we have to follow formula [17.3]: 2 opt DS Q H D = 1,000 (Annual Demand) S = $25.00 (Per Order Cost) H = 10 percent (Holding Cost per year) 2 2(1000)25 500 1 22.36067977 00 opt DS Q H units 2 1000 25 2000 25 100 100 opt X X X Q 2000 25 50000 100 100 opt X Q 50000 500 100 opt Q 22.4 (Units should be ordered) What I havent figured out is, how the excel template came up with 23 for the answer. References: Operations & Supply Management, Jacobs, Chase & Aquilano, Chapter 17, Pages 557-558 Operations & Supply Management 12E DVD, Chapter 17, Inventory Control Template...
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This note was uploaded on 08/24/2011 for the course MGMT 375 taught by Professor Martinbrennan during the Summer '10 term at Park.

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