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TASK-1 Using EOQ technique calculate the required items Tim John is the purchasing manager at the headquarters...

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General Management

TASK-1 Using EOQ technique calculate therequired items

Tim John is the purchasing manager at the headquarters of amultinational fast food chain with a central inventory operation.Tim's fastest-moving inventory item has a demand of 30 units perday. The cost of each unit is $150, and the inventory carrying costis $5 per unit per year. The average ordering cost is $70 perorder. (It is a corporate operation, and there are 300 working daysper year)

  1. What is the EOQ?
  2. What is the average inventory if the EOQ is used?
  3. What is the optimal number of orders per year?
  4. What is the optimal number of days in between any twoorders?
  5. What is the annual cost of ordering and holding inventory?
  6. What is total inventory management cost?
  7. What is total materials cost
  8. What is the total annual inventory cost to be recorded inaccounts?

Answer & Explanation Solved by verified expert
3.6 Ratings (454 Votes)
Given Daily Demand d 30 unitsNo of working days N 300 daysAnnual Demand D d N 30 300 9000 unitsCost of each unit P 150Carrying cost per unit per year H 5Order cost S 70Economic Ordering    See Answer
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