The Trektronics store begins each week with 520 phasers in stock. This stock is
ID: 2768666 • Letter: T
Question
The Trektronics store begins each week with 520 phasers in stock. This stock is depleted each week and reordered. The carrying cost per phaser is $47 per year and the fixed order cost is $93.
What are the current total carrying costs? (Do not round intermediate calculations.)
What are the current restocking costs? (Do not round intermediate calculations.)
What is the economic order quantity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Should Trektronics increase or decrease its order size?
What are the current total carrying costs? (Do not round intermediate calculations.)
What are the current restocking costs? (Do not round intermediate calculations.)
What is the economic order quantity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Should Trektronics increase or decrease its order size?
How many orders per year will Tektronics place under the new policy? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)Explanation / Answer
a. Total carrying costs = 47*520 = $24,440
b. Total restocking costs = 93*52 = $4,836
c. EOQ = sqrt (2* annual usage * order cost/ Carrying cost per year)
Annual usage = 520*52 = 27,040 phaserrs
So EOQ = sqrt(2*27040*93/47) = 327.12 Units
d. Tektronics should decrease its order size
e. The new order per year = 327.12 * 52 = 17,010.24 = 17,011 Units
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