Compute the total purchase cost and annual holding cost

Reference no: EM131065304

Given the following information for an important purchased part,

Annual requirements (R)	= 5,000 units
Order cost (S)	= $100 per order
Holding rate (k)	= 20%
Unit cost (C)	= $20 per unit
Lead time (LT)	= 6 days
Number of days per year	= 360 days

Compute the

(a) EOQ,

(b) total purchase cost,

(d) annual order cost,

(e) annual total cost,

(f) reorder point,

(g) number of orders placed per year, and

(h) time between orders. Use Microsoft Excel to plot the cost curves (annual holding cost, annual order cost, and annual total cost) on the vertical axis, and the order quantity on the horizontal axis.

Reference no: EM131065304

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