Calculate the EOQ for the following items based on the information given. Annual

Question

Calculate the EOQ for the following items based on the information given. Annual Demand Annual Holding Cost (per unit) Order Cost Item #1 30000 $0.75 $25.00 Item #2 15000 $3.15 $30.00 Item #3 55000 $2.50 $20.00 Item #4 80000 $2.00 $40.00 EOQ Item #1 Item #2 Item #3 Item #4 Calculate the EOQ for the following items based on the information given. Annual Demand Annual Holding Cost (per unit) Order Cost Item #1 30000 $0.75 $25.00 Item #2 15000 $3.15 $30.00 Item #3 55000 $2.50 $20.00 Item #4 80000 $2.00 $40.00 EOQ Item #1 Item #2 Item #3 Item #4

Explanation / Answer

Item#1) Annual Demand              30,000.00 Ordering costs                      25.00 Carrying costs                         0.75 EOQ = Underroot(2*A*O)/C EOQ = Underroot(2*30000*25)/0.75 EOQ = Underroot(1500000/0.75) EOQ = Underroot(2000000) EOQ = 1414.21 Units Item#2) Annual Demand              15,000.00 Ordering costs                      30.00 Carrying costs                         3.15 EOQ = Underroot(2*A*O)/C EOQ = Underroot(2*15000*30)/3.15 EOQ = Underroot(900000/3.15) EOQ = Underroot(285714.29) EOQ = 534.52 Units Item#3) Annual Demand              55,000.00 Ordering costs                      20.00 Carrying costs                         2.50 EOQ = Underroot(2*A*O)/C EOQ = Underroot(2*55000*20)/2.5 EOQ = Underroot(1100000/2.50) EOQ = Underroot(440000) EOQ = 663.32 Units Item#4) Annual Demand              80,000.00 Ordering costs                      40.00 Carrying costs                         2.00 EOQ = Underroot(2*A*O)/C EOQ = Underroot(2*80000*40)/2 EOQ = Underroot(6400000/2) EOQ = Underroot(3200000) EOQ = 1788.85 Units

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