Calculate the Economic Order Quantity and reorder point

Assignment Help Management Theories

Reference no: EM132314809

Inventory Management Assignment -

Instructions - For this assignment, you will calculate the Economic Order Quantity (EOQ) and reorder point for each of the book types. Lead time for any type of book is 5 weeks.

Assume the demand data given in the spreadsheet "Module 5 EOQ Data" is normally distributed. The accounting department estimates the average costs for A, B, and C books to be $5.05, $7.39, and $10.25, respectively, for a single copy. It costs 45% per year, per unit, for annual holding costs. The batch size is 3,500 for an A book, 1,000 for a B book, and 500 for a C book.

The administrative cost for ordering a batch of a book has been estimated to be $125.

What is your recommendation for each type of book? Why?

How much safety stock should be held, by type of book?

What is the total cost of your recommendation?

What are the advantages and disadvantages of each option?

Answer the questions thoroughly within the attached excel spreadsheet and justify the answer with supported data.

Attachment:- Assignment - Data File.rar

Reference no: EM132314809

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