Joe Henry\'s machine shop uses 2,530 brackets during the course of a year. the b
ID: 343887 • Letter: J
Question
Joe Henry's machine shop uses 2,530 brackets during the course of a year. the brackets: These brackets are purchased from a supplier 90 miles away. The following information is known about are pu Annual demand Holding cost per bracket per year Order cost per order Lead time Working days per year 2,530 $1.30 $19.25 2 days 250 a) What is the EOQ?units (round your response to two decimal places) b)What is the average inventory if the EOQ is used?units (round your response to two decimal places) What would be the annual inventory holding cost round your response to two decimal places) c Given the EOQ, how many orders will be made annually? orders round your response to two decimal places What would be the annual order cost? S| round your response to two decimal places). d)Given the EOQ, what is the total annual cost of managing (ordering and holding) the inventory? S (round your response to two decimal places) e)What is the time between orders? days round your response to two decimal places ) What is the reorder point (ROP)? units (round your response to two decimal places) Enter your answer in each of the answer boxes. Show Allx T. QM 352 Grade Projec xlsx · weingarten2.swfExplanation / Answer
= Square root ( 2 x 19.25 x 2530 /1.3)
=273.72
EOQ = 273.72 UNITS
Annual inventory holding cost
= annual unit inventory holding cost x average inventory
= $1.3 x 136.86
= $177.91
AVERAGE INVENTORY IF EOQ IS USED = 136.86
AVERAGE INVENTORY HOLDING COST = $177.91
= Annual demand / EOQ
= 2530 / 273.72
= 9.24
Annual order cost
= Ordering cost per order x Number of orders
= $ 177.87
NUMBER OF ORDERS TO BE MADE ANNUALLY =9.24
ANNUAL ORDERING COST = $177.87
= Annual inventory holding cost + Annual ordering cost
= $177.91 + $177.87
= $355.78
TOTAL ANNUAL COST OF ORDERING AND HOLDING THE INVENTORY = $355.78
= (2530 / 250) x 2 UNITS
= 20.24 UNITS
REORDER POINT = 20.24 UNITS
EOQ = 273.72 UNITS
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