A company manufactures a line of twelve items. Their usage and unite cost with t

Question

A company manufactures a line of twelve items. Their usage and unite cost with the annual dollar usage are shown in the parenthesis (part #, unit usage, unit cost $): (1, 1100, $2), (2, 1100, $60), (3, 200, $4), (4, 700, $1), (5, 100, $3), (6, 30, $25), (7, 300, $22), (8, 1500, $10), (9, 900, $2), (10, 500, $12), (11, 1500, $40), (12, 600, $8). The cumulative annual dollar usage till part 4 after sorting is: Select one: O A. $124,000 B. $126,000 C. $136,200 D. $137,550 E. none of above A company decides to establish an EOQ for an item. The annual demand is 25,000 units, each unit costing $10, ordering cost is $40 per order, and inventory-carrying cost rate is 20%. The EOQ in units should be: Select one: O A. 1000 units B. 1100 units O C. 1118 units D. 790 units E. None of them

Explanation / Answer

Given

D = 25000 units

C = $ 10

C0 = $40 per order

Carrying cost = 20% of unit cost

So Ch = .2 × 10 = $2

EOQ = ?(2*D*Co/Ch) = ?(2*25000*40/2) = 1000 units

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