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The XYZ Inc. buys mother boards for its computer assembly. The following information is available, use generally accepted rounding rules. You will need to develop an excel program for handling this problem.
Annual Demand, units/year
40,000
Order Cost, $/per order
$20
Carrying Costs (annual), as of unit cost
0.3
Unit Costs, $/per unit
$50
Lead Time (days)
5
Safety Stock, units
20
Days of a Calendar Year
250
Answer
a. EOQ= ?2DO/IC, D=demand, O=order cost; I=inventory carrying cost as of unit cost; C=unit cost is $327
b. Total Orders a Year is 222
Maximum Inventory is not 347
d. Minimum Inventory is 0
e. Average Inventory is 183
f. Reorder Point is 820
g. Annual Inventory Carrying Costs is $2,749
h. Annual Inventory Carrying Costs & Order Costs is $5,199
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