Clap Off Manufacturing uses 2,200 switch assemblies per week and then reorders a

Question

Clap Off Manufacturing uses 2,200 switch assemblies per week and then reorders another 2,200. Assume the relevant carrying cost per switch assembly is $5.90 and the fixed order cost is $620. (Enter your answer as directed, but do not round intermediate calculations.)

Clap Off Manufacturing uses 2,200 switch assemblies per week and then reorders another 2,200. Assume the relevant carrying cost per switch assembly is $5.90 and the fixed order cost is $620. (Enter your answer as directed, but do not round intermediate calculations.)

Explanation / Answer

A. Carrying costs=unit per cost *total no.of units/2

  Carrying costs=5.9*(2200/2) =$6490

b.Restocking stock= fixed order cost *total weeks in year

Restocking stock=$620*52= $32240.

c. Economic order quantity=(2*52*2200*650/5.90)=$4903.40

d.Number of oredrs per year=52*2200/4903.40=23.33

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