# EMAM_8-9-ULO_A_Analyze_1 - Copy.docx - John Mark Jr P Emam...

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John Mark Jr. P. Emam BSA ACC 213 2929 7:30 - 8:30 ULO a Let’s Analyze Activity 1 Problem 1 1. EOQ = 2 AD CPO CCPU = 2 ( 5,000 units )( P 900 ) P 25 = 360,000 units = 600 units Annual Demand (AD)= 1,250 units * 4 = 5,000 units Cost per Order (CPO) = P900 Carrying Cost per Unit (CCPU) = P25 2. Number of Orders in a Year = 12 mos / 3 mos = 4 orders 3. Average Inventory Based on EOQ = 600 units / 2 = 300 units 4. Total Carrying Cost = CCPU * Average Inventory = P25 * 300 units = P7,500 Total Ordering Cost = Cost per Order * # of Order = P900 * 4 = P3,600 Relevant Inventory Cost at EOQ = Ordering Cost + Carrying Cost = P3,600 + P7,500 = P11,100 5. Total Relevant Cost for 2,000 units-order size = Ordering Cost + Carrying Cost = P2,250 + P25,000 = P27,250 Ordering Cost = Cost per Order * # of orders = P900 * (5,000 units / 2,000 units) = P2,250 Carrying Cost = CCPU * Average Inventory
= P25 * (2,000 units / 2) = P25,000 Total Relevant Cost for 1,000 units-order size = Ordering Cost + Carrying Cost = P4,500 + P12,500 = P17,000 Ordering Cost = Cost per Order * # of orders = P900 * (5,000 units / 1,000 units) = P4,500 Carrying Cost = CCPU * Average Inventory = P25 * (1,000 units / 2) = P12,500 Total Relevant Cost for 600 units-order size = Ordering Cost + Carrying Cost = P7,500 + P7,500 = P15,000