Clap Off Manufacturing uses 3,200 switch assemblies per week and then reorders a

Question

Clap Off Manufacturing uses 3,200 switch assemblies per week and then reorders another 3,200. Assume the relevant carrying cost per switch assembly is dollar 6.90 and the fixed order cost is S525. {Enter your answer as directed, but do not round intermediate calculations.) Required: Calculate the carrying costs. Calculate the restocking costs. Calculate the economic order quantity. (Round your answer to 2 decimal places (e.g., 32.16).) Calculate the EOQ number of orders per year. (Round your answer to 2 decimal places (e.g., 32.16).)

Explanation / Answer

a)Carrying cost = 3200*6.9 *1/2=11040

b)Restocking cost= Number of times order in a year* Per order cost

                        = 52weeks *525= 27300

c) EOQ =Square root of [2* Total quantity *er order cost /carrying cost]

             = SR [ 2* (3200*52) *525 / 6.9]

             =SR [2* 166400*525 / 6.9]

              = SR [174720000/6.9]

             = SR [25321739.13]

                = 5032.07 approx

4)Number of orders =Total quantity required /EOQ

                            = 3200*52 / 5032.07

                             = 166400/5032.07

                             = 33.07 orders

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