The Trektronics store begins each week with 240 phasers in stock. This stock is

Question

The Trektronics store begins each week with 240 phasers in stock. This stock is depleted each week and reordered. The carrying cost per phaser is $29 per year and the fixed order cost is $51. What are the current total carrying costs? (Do not round intermediate calculations.) Carrying costs $ What are the current restocking costs? (Do not round intermediate calculations.) Restocking costs $ What is the economic order quantity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) EOQ $ Should Trektronics increase or decrease its order size? Increase Decrease How many orders per year will Tektronics place under the new policy? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Orders per year $

Explanation / Answer

Answer

Total Carrying Cost = Carrying cost * No. of Item perorder/2

= 29*240/2

= $ 3480

Current Restocking cost = (240/2)*29+12480/240

= $ 3532

EOQ = SQRT 2*12480*7011/29

= 2456.48 = 2456

EOQ increase its order size.

no. of order = 12480/2456

= 5 order

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