Inventory Managment
Answer of Question No. 4-1a ) The Economic order quantity can be calculated as EOQ = [pic 1]A = 2500 = 19[pic 2] = 1.90[pic 3]Therefore EOQ = [pic 4] = 223.60 = 224 ( approximately )Given the EOQ, what is the average inventory?Average Inventory = [pic 5]= [pic 6]= 112What is the annual inventory holding cost?Annual Inventory holding cost = [pic 7] = $1.90 x [pic 8] =$212.8In minimizing cost, how many orders would be made each year?No. of orders = [pic 9] = [pic 10] = 11.16 = 12 orders approximately What would be the annual ordering cost? Annual ordering cost = [pic 11][pic 12] = 19 x 12 = $ 228Given the EOQ, what is the total annual inventory cost (including purchase cost)?Total Annual Inventory Cost = Annual inventory holding Cost + Annual ordering cost + purchase cost = 212.8 + 228 + 2500 *19 = 47940.8What is the time between orders?Since we needs to order 12 times a year, and the lead time is 4 days, the time between orders is = [pic 13] = 26.42What is the ROP?ROP = Daily demand * Lead TimeReorder point = [pic 14] = 40Answer of Question No. 4-2Find the total amount spent on each item during the year. What is the total investment for all these?[pic 15]Please check the column no. 4Find the percentage of the total investment in inventory that is spent on each item.Please check the column no. 5
Essay About Economic Order Quantity And Average Inventory
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Latest Update: April 3, 2021
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