ain dohew Calculator Problem 8-7 Laird Company uses 405 units of a part each yea

Question

ain dohew Calculator Problem 8-7 Laird Company uses 405 units of a part each year. The cost of placing one order is $5: the cost of carrying one unit in invencory for a year is $2. Laird currently orders 81 units at a time. A. The arsual ondering coot of Laird's ourent policy is 25 B. The annual carrying cost of Laird's current policy is C The total cost of Laird's current policy is D. What is the economic order quantity (EOQ) for Laird? t__]x E. What is the total lnventory-related cost at the E0Q Pataly coect

Explanation / Answer

A Annual ordering cost (total requirement/quatity per order*cost per order) 25 =405/81*5 B Annual carrying cost (Order quatity*carrying cost per unit) 162 =2*81 C Total cost of current policy 187 =25+162 D EOQ=(2*ANNUAL DEMAND*per Order cost/Per unit holding cost)^(1/2) 45 =(2*405*5/2)^(1/2) e Total inventory related cost under EOQ 135 =(405/45*5)+(45*2)

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