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Ross White's machine shop uses 2,500 brackets during the course of a year, and this usage is relatively constant by the year. These brackets are purchased from a supplier 100 miles away for $15 every, and the lead time is 2 days. The holding cost per bracket anually is $1.50 (or 10% of the unit cost) and the ordering cost per order is $18.75. There are 300 working days per year.
(a) What is the EOQ?
(b) Given the EOQ, what is the average inventory? What is the yearly inventory holding cost?
(c) In minimizing cost, how many orders would be made every year? What would be the annual ordering cost?
(d) Given the EOQ, what is the total annual inventory cost (having purchase cost)?
(e) What is the time between orders?
(f) What is the ROP?
Absolute liquid ratio - Liquidity ratios Although receivables debtors and bills receivable are usually more liquid than inventories yet there may be doubts regarding their rea
EOQ mathematical model As costs of ordering and holding stock are equal at the EOQ point, we can build a simple mathematical model to solve the problem, as follows: (Q/ 2) X
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Painter Ltd, which manufactures and sells a single product, is currently producing and selling 102,000 units per month, which represents 85% of its full capacity. Total monthly cos
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