daddy\'s home, association currently faces the following ordering decision relat

Question

daddy's home, association currently faces the following ordering decision relating to purchases of very important item: monthly demand is 2400 units, ordering cost is $24, holding cost is $0.55, purchasing price is $.88, and discount price is $.82. Quantity needed to qualify for discount is 1,650 items. What is going to be your order? daddy's home, association currently faces the following ordering decision relating to purchases of very important item: monthly demand is 2400 units, ordering cost is $24, holding cost is $0.55, purchasing price is $.88, and discount price is $.82. Quantity needed to qualify for discount is 1,650 items. What is going to be your order?

Explanation / Answer

So the order is going to be 1650

Monthly Demand 2400 D Annual Demand 28800 Units K Ordering cost 24 $ h Holding cost/unit 0.55 $ P Cost per unit 0.88 $ W Working days 240 days d Daily demand (D/W) 120 Q Economic lot size 1585.387822 Units Optimal Prod quantity Sqtr((2*Annual Demand*order cost)/Annual inventory carrying cost) (sqrt(2*KD/h) Avg S Avg Stock (Q/2) 792.6939109 793 Avg Stock N Optimal no of orders 18.16590212 (Demand/EOQ) 18 No of Orders DBO Days between order (Days/N) 13.21156518 13.21 Days Cycle time TC Total cost ((KD/Q)+(hQ/2)) 871.96 $ Total cost OC Ordering cost (KD/Q) 435.98 $ HC Holding cost (hQ/2)) 435.98 $ PC Production cost (P*D) 25344.00 $ GTC 26215.96 $ P* Price 0.82 New EOQ Q* For Discount 1650 Units OC New Ordering cost (KD/Q*) 418.91 $ Total cost HC New Holding cost (hQ*/2)) 453.75 $ PC Production cost (P*D) 23616.0 $ GTC* New Total cost ((KD/Q*)+(hQ*/2)) 24488.66 $

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