Consider a basic economic order quantity eoqmodel

Assignment Help Business Management

Reference no: EM13238079

Consider a basic economic order quantity (EOQ) model with the following characteristics:

Item cost: $15
Item selling price: $20
Monthly demand: 500 units (constant)
Annual holding cost: $1.35 per unit
Cost per order: $18
Order lead time: 5 working days
Firm's work year: 300 days (50 weeks @ 6 days per week)
Safety stock: 15% of monthly demand

For this problem, determine the values of:

a) Q* the optimal order quantity and reorder point.
b) M, the maximum quantity in inventory.
c) T, the cycle time
d) total annual inventory cost
e)what is the annual ordering cost?
f) suppose the vendor demands purchases in multiples of 500 only what is the increase in total annual inventory cost that this cause
g) What is the average lead time demand?
h)If the standard deviation of the lead time demand is 10 units,what is the cycle service level with the given safety
i) If the standard deviation of the lead time demand is 10 units, what would be the safety stock if cycle service level is 99%?
j) Assuming cycle service level of over 99% is not advisable, what is the annual cost of carrying unnecessary safety stock?
Required minimum-1 page

Reference no: EM13238079

Questions Cloud

National supply chain vs. global supply chain : Global supply chain systems are increasingly implemented to many firms as they strive to capture their market share in global market

Compare african immigrants with our immigrant groups : Compare and contrast African immigrants with our immigrant groups? How are they different? What are the implications of these differences for their adjustment to the larger society?

Religious beliefs should justify war-the song of roland : To what extent do you think religious beliefs should justify war? How is this shown in "The Song of Roland"? Cite examples of how religious beliefs have led to war in the last two centuries. Can religious wars be avoided in the future? Why or why not..

Compare and contrast the religious ideas of buddhism : Compare and contrast the religious ideas of Buddhism that led to monasteries in Asia with the monastic ideal of Christianity in the Middle Ages.

Consider a basic economic order quantity eoqmodel : Consider a basic economic order quantity (EOQ) model

Conquest of mexico and the conquest of peru : Compare and contrast the Conquest of Mexico and the Conquest of Peru in the 16th century. How did the structures of the indigenous empires in these two regions differ?

Consider us military involvement in lebanon in 1982-84 : Consider US military involvement in Lebanon in 1982-84 with that in Iraq in 2003-2011. List 3 similarities between the two cases and 3 differences. Then compare US threat perception (interests, ends), policy (action, means) and outcome in each episod..

Right versus right moral dilemma or right versus wrong : Read the Lake Pleasant case after you have completed the reading for the week. Answer the following questions for the case in your initial discussion post

Causes for rise to political importance radical islamists : Discuss at least three causes for the rise to political importance o radical islamists in so many countries of the middle east. what forms of resistance have they met within these countries.

User Account

All Pages