M Chapter 13 Homework 1 × ezto.mheducation.com/hm.tpx Problem 13-13 A mail-order
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M Chapter 13 Homework 1 × ezto.mheducation.com/hm.tpx Problem 13-13 A mail-order house uses 17,650 boxes a year Carrying costs are 60 cents per box a year, and ordering costs are $96. The following price schedule applies. Number of Price per Box 1,000 to 1,999 2,000 to 4,999 5,000 to 9,999 10,000 or more $1.25 1.20 1.15 1.10 a. Determine the optimal order quantity (Round your answer to the nearest whole number.) Optimal order quantity boes b. Determine the number of orders per year (Round your answer to 2 decimal places.) Number of order per year References eBook & Resources Cortana. Ask me anything.Explanation / Answer
a)
EOQ=Sqrt(2*D*Co/Cc)
b) Number of Orders= 17650/2377=7.42===8
PS.
the total Cost at Order size of 2377=Co*D/Q +Cc*Q/2 +PD=96*17650/2377+0.6*2377/2 +17650*1.2=22605.9
but if we order 5000 units total cost=96*17650/5000 +0.6*5000/2 +15000*1.15+2650*1.2=22268.88
hence the optimal order size should be 5000 with the last order size as 2650 and the number of orders then will be 4.
Demand 17650 Ordering Cost (Co) 96 Carrying Cost(Cc) 0.6 EOQ 2376.55=2377Related Questions
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