Louise Manufacturing uses 1,900 switch assemblies per week and then reorders ano
ID: 2717605 • Letter: L
Question
Louise Manufacturing uses 1,900 switch assemblies per week and then reorders another 1,900. The relevant carrying cost per switch assembly is $7.00, and the fixed order cost is $950.
Calculate the economic order quantity. (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)
Louise Manufacturing uses 1,900 switch assemblies per week and then reorders another 1,900. The relevant carrying cost per switch assembly is $7.00, and the fixed order cost is $950.
Explanation / Answer
Carrying Cost per unit 7 per unit Ordering cost per unit 950 per order EOQ= SQRT*2*A*O/C A = 1900*52 98800 EOQ = SQRT *2*98800*950/7 EOQ = 5179 EOQ = 5179 Total Ordering Cost = 950*52 49400
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