BUISENESS MANAGEMENT
INVENTORY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Given the information below;D-4000 per yearHC-RM 9 per yearSetup cost-RM25Lead time-5 daysWorking days per year-250 daysCalculate EOQ, ROP and Average Q. Choose the right answer.
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149.07, 80, 74.55
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148.07, 80, 75
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146.07, 80, 80
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145.08, 79.90, 76
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Explanation:
Detailed explanation-1: -Economic Order Quantity Usually the time period is one year. The total cost of inventory is the sum of the purchase, ordering and holding costs. As a formula: TC = PC + OC + HC, where TC is the Total Cost; PC is Purchase Cost; OC is Ordering Cost; and HC is Holding Cost.
Detailed explanation-2: -To calculate the economic order quantity, you will need the following variables: demand rate, setup costs, and holding costs. The formula is: EOQ = square root of: [2(setup costs)(demand rate)] / holding costs.
Detailed explanation-3: -Annual ordering cost = (D * S) / Q S = Ordering cost.
There is 1 question to complete.