b. Indicate what data is required for the calculation of the EOQ A. Weekly deman

Question

b. Indicate what data is required for the calculation of the EOQ A. Weekly demand B. Desired cycle-servi C. Percent of cost for annual holding cost D. Number of days operating/week E. Number of weeks operating/year F. Lead time G. Order cost H. Engine cost I. Standard deviation of weekly demand ce level c. The calculation of safety stock depends of which of the following data? A. Percent of cost for annual holding cost B. Engine cost C. Number of days operating/week D. Desired cycle-servi E. Number of weeks operating/year ce level F, Weekly demand G. Standard deviation of weekly demand H. Order cost . Lead time

Explanation / Answer

The answers are listed below :

b) The data required for calculation of EOQ are a, e, g, h

EOQ = sqrt(2*D*S/H) where

D= annual demand and is derived from weekly demand and workings weeks per year

S = Ordering Cost

H = Holding cost and is derived as a percentage of the product cost

c) The calculation of safety stock depends on d, g, i

SS = z*(d)*sqrt(LT)

Safety Stock required value of z which is obtained from the service level

Standard Deviation of the demand

Lead time

d) The calculation of reorder point depends on c, e, f, i

Reorder Point = Demand in lead time + Safety Stock

e) The total annual cost depends on a, b, e, h, i

The total annual cost includes product cost + ordering cost + holding cost

f) The calculation of time between review depends on b, d, e, f, h

P = EOQ/ D

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