Determine the economic order quantity

Assignment Help Operation Management

Reference no: EM132177819

A large bakery buys flour in 20 kg bags. The bakery uses an average of 4,540 bags a year. Preparing an order, receiving the shipment, and paying the invoice costs $18 per order. Annual holding cost is $6 per flour bag.

a. Determine the economic order quantity. (Round the final answer to the nearest whole number.)

EOQ

b. What is the average number of bags on hand (i.e., average cycle inventory)? if EOQ is used? (Round intermediate calculations. Round the final answer to 1 decimal place.)

Average number of bags on hand

c. How many orders per year will there be if EOQ is used? (Round the final answer to the nearest whole number.)

Orders per year

d. Calculate the total annual cost of ordering and holding flour for EOQ. (Do not round intermediate calculations. Round the final answer to 2 decimal places.)

Total annual cost $

e. If ordering cost were to increase by 50 percent per order, by what percentage would the EOQ change? (Round intermediate calculations. Round the final answer to the nearest whole number.)

Percentage change %

Reference no: EM132177819

Questions Cloud

Describe what it means to you to provide quality customer : Describe some techniques that you could apply toward quality and positive service while conducting a performance evaluation for an employee.

Elements in the storming stage of group development : What are the important elements in the storming stage of group development?

How the information you gleaned from this course : Explain why those competencies are important and how the information you gleaned from this course will improve your own leadership style and strategy.

Are generalizations supported by specific details : Are generalizations and opinions supported by specific details? Did you bring up the opposition's viewpoints and refuted them with counter-arguments

Determine the economic order quantity : Determine the economic order quantity. Calculate the total annual cost of ordering and holding flour for EOQ.

What actions can company abc take in this situation : Do you have the right to control what she tweets? Why? What actions can Company ABC take in this situation?

Analyze and compare capital investment opportunities : Analyze and compare capital investment opportunities based on an understanding of the basics of capital budgeting and capital structure decisions.

Legal person compare to your own ideas about corporations : How does the idea of a corporation as a legal person compare to your own ideas about corporations?

Thesis of the authors in regards to the goal of diversity : As explained in “Strategic Organizational Diversity: A Model?”, what is the thesis of the authors in regards to the goal of diversity?

User Account

All Pages