What are the eoq and total cost of this situation

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Reference no: EM13842728

Jose sells gym equipment from his house in Dorado. Annual demand for the PuertoFlexers, his best-selling product, is 2,000. Assume that the year has 360 days. The product has a cost value of $150 (this is what Jose pays.) The annual holding cost per unit is $5.50 and the cost to place an order is $25, and it takes an average of eight days to arrive.

a. What are the EOQ and total Cost of this situation?

b. how long does a cycle time last?

c. if jose has space for only 140 products, can all be stored in his facilities?

d. If Jose expects demand to rise by 15% next year, would he be required to make any warehousing arrangements?

e. If Jose´ gets a price discount based on the amount bought (see the range below), what is the EOT and Total Cost of the situation? (NOTE: For this question, use a holding cost of 12% of the price.)

Amount Range Cost/Unit

1-110 $150

111-140 $125

More than 141 $100

Reference no: EM13842728

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