What is the total annual storage cost of spare

Reference no: EM132724944

INVENTORY MANAGEMENT PROBLEMS

Mall-o-Cars Inc. sells several car brands and provides after-sales service for those car brands. Spare parts X7B are used to repair water pumps. Every year, 10,000units of X7B Spare Parts are used; Currently, these parts are purchased from suppliers outside the company. The number of units purchased per order is 1,000 units. The cost to place each order for Mall-o-Cars is $ 25 and a storage fee of $ 2 per part per year

Requested:

Question 1. What is the EOQ for X7B spare parts?

Question 2. What is the number of orders per year for X7B spare parts that Mall-o-Cars will place with EOQ policy?

Question 3. What is the total annual order cost of spare parts for X7B for a year under the EOQ policy?

Question 4. What is the total annual storage cost of spare X7B for a year under EOQ policy? What are the total costs regarding the annual inventory of X7B parts for a year under EOQ policy?

Reference no: EM132724944

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