Ross White’s machine shop uses 2,500 brackets during the
course of a year, and this usage...
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Ross White’s machine shop uses 2,500 brackets during thecourse of a year, and this usage is relatively constant throughoutthe year. These brackets are purchased from a supplier 100 milesaway for $15 each, and the lead time is 2 days. The holding costper bracket per year is $1.50 (or 10% of the unit cost), and theordering cost per order is $18.75. There are 250 working days peryear.
What is the EOQ?
Given the EOQ, what is the average inventory? What isthe annual inventory holding cost?
In minimizing cost, how many orders would be placed eachyear? What would be the annual ordering cost?
Given the EOQ, what is the total annual inventory cost(including purchase cost)?
What is the time between orders?
What is the ROP?
Answer & Explanation
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4.3 Ratings (657 Votes)
SolutionGiven that Demand 2500 Ordering cost 1875 andHolding cost 15a The Economic Order Quantity is calculated using theformula 250b The average inventory is calculated as followsAverage inventory
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