Louise Manufacturing uses 2,000 switch assemblies per week and then reorders ano
ID: 2748979 • Letter: L
Question
Louise Manufacturing uses 2,000 switch assemblies per week and then reorders another 2,000. The relevant carrying cost per switch assembly is $7.50, and the fixed order cost is $1,000. What are the current carrying costs? (Do not round intermediate calculations.) Carrying costs $ 7500 What are the order costs? (Do not round intermediate calculations.) Order costs $ Calculate the economic order quantity (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.) EOQ 5266.24Explanation / Answer
Quantity Order = 2000
Annual Quantity Required = Weekly Consumption* No of week in a year
Annual Quantity Required = 2000*52
Annual Quantity Required = 104000
No of Order in a year = Annual Quantity Required / Quantity Order
No of Order in a year = 104000/2000
No of Order in a year = 52
Order Cost = No of Order in a year *Fixed Ordering cost
Order Cost = 52*1000
Order Cost = $ 52,000
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