Clap Off Manufacturing uses 1,300 switch assemblies per week and then reorders a

Question

Clap Off Manufacturing uses 1,300 switch assemblies per week and then reorders another 1,300. Assume the relevant carrying cost per switch assembly is $5 and the fixed order cost is $575.

Required:
(a) Calculate the carrying costs. (Do not include the dollar sign ($).)

Carrying costs $

(b) Calculate the restocking costs. (Do not include the dollar sign ($).)

Restocking costs $

(c) Calculate the economic order quantity. (Round your answer to 2 decimal places (e.g., 32.16).)

Economic order quantity

(d) Calculate the EOQ number of orders per year. (Round your answer to 2 decimal places (e.g., 32.16).)

Number of orders per year

Explanation / Answer

Given, Order Cost, C= $575, Holding Cost, h= $5 per switch per week Demand, D= 1300 switch assemblies per week Current Order Qty, Q= 1300 (a) Carrying Cost = (Q/2)*h = (1300/2) * 5 = $3250 (b) Order Cost = C*D/Q = 575*1300/1300 = $575 T (b) EOQ, Q* = sqrt(2*C*D/h) = sqrt(2*575*1300/5) = 546.8 (d) Number of orders = D/Q* = 1300/546.8 = 2.38 ~ 3 orders per week Number of orders in a year = 52* 2.38 = 123.76 (assuming 52 weeks)

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.