What is the most economical order quantity

Assignment Help Operation Management

Reference no: EM131118405

A firm machinery manufacture requires 7,000 air filters per year as replacement parts on mechanical harvesters. The filters cost $3 each and are stored in rented facilities at a cost of $.35 per unit-year, with storage requirements based upon the maximum number of units purchased at one time, Q. The interest Ccarrying) costs, based upon average inventory, are $.30 per unit-year, and the firm uses $35 per order as the ordering cost. What is the most economical order quantity?

Reference no: EM131118405

Questions Cloud

Find out the hospital procedure for overnights : Marilyn's 5-year-old daughter has the flu and needs to be admitted to the hospital for dehydration. Marilyn wants to stay overnight with her in the hospital, but the head nurse refuses her request. When Marilyn comes to you for help, you find out the..

Culturally competent helper requires being open : Becoming a culturally competent helper requires being open to a. indigenous health and healing practices. b. psychodynamic explanations for clients' irrational behavior. c. higher malpractice insurance premiums. d. working longer hours in one's offic..

Estimate the equilibrium price and quantity : Estimate the equilibrium price and quantity (b) Graph the market equilibrium (c) Suppose the price of a substitute good, say gadgets, suddenly falls below the equilibrium price of widgets, show and explain how the new price of gadgets will affect ..

What is the value of the bond : Arizona Public Utilities issued a bond that pays $70 in interest, with a $1,000 par value and matures in 25 years. The markers required yield to maturity on a comparable-risk bond is 8 percent. What is the value of the bond if the markers required ..

What is the most economical order quantity : A firm machinery manufacture requires 7,000 air filters per year as replacement parts on mechanical harvesters. The filters cost $3 each and are stored in rented facilities at a cost of $.35 per unit-year, with storage requirements based upon the max..

Must the contract be in writing to be enforceable : ABC company hired Andrew as its research director. The terms of the employment contract is five years. As ABC knows at the moment of signing, Andrew is terminally ill when the contract is created, and is not expected to live more than nine months. Mu..

Virtual financial project : You are the project manager of a large, virtual financial project. You want to improve the functioning of the project team. Which of the techniques below would not likely improve the effectiveness and efficiency of the project team?

Calculate total annual costs using the EOQ ordering policy : Sam’s Auto Shop services and repairs a particular brand of foreign automobile. Sam uses oil filters throughout the year. The shop operates fifty-two weeks per year and weekly demand is 156 filters. Calculate the total annual costs associated with Sam..

Calculate economic order quantity-average inventory level : Custom Computers, Inc. assembles custom home computer systems. The heat sinks needed are bought for $12 each. Annual demand is 5,000 heat sinks, the annual inventory holding cost rate is $4 per unit, and the cost to place an order is estimated to be ..

User Account

All Pages