Search 13:07 of stock represents 10 per cent per annum. Calculate in one year Ec

Question

Search 13:07 of stock represents 10 per cent per annum. Calculate in one year Economic Order Quantity Average of stock e Number of orders to do aTotal item cost Total ordering cost Total holding cost Total cost of Stock Management (e+ f) EXERCISE 3 A company needs 8,000 units per year of a product, which has a cost of item of 8 per unit. The ordering cost is 24 and the holding cost is 20 % of item cost. The lead time is 2 weeks. Consider a constant demand Calculate Economic order quantity (EOa). Total cost of stock per year Number of orders per year d Reorder point. EXERCISE 4 The local Toyota dealer has to decide how many spare shock absorbers of a particular type to order for repairing Toyota automobiles. This shock absorber has a demand of four units per month and costs 25 each The holding cost represents 30 per cent per year of item cost, and the ordering cost is 15 per order. What is the EOQ for this item? How often will the dealer reorder this part? What is the annual cost of ordering and holding this part?

Explanation / Answer

Exercise 3:

D Demand annually 8000 units Annually P Purchase cost 8 $ per unit K Ordering cost 24 $ per order h=(0.2*P) Holding cost 1.6 $ per unit LT Lead time 2 days W Working days 365 Days LTD=LT*D/W Lead time demand 43.83562 Units R= LTD So reorder point 43.84 units Ans D EOQ (Sqrt(2*k*D/h) 489.90 units Ans A N=D/EOQ No of Orders 16.32993 Ans C Th Total holding cost 391.9184 $ To Total ordering cost 391.9184 $ Tp Total cost of Product 64000 $ To+Th+Tp Total cost of stock 64783.84 $ Ans B

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