KU MGM351 Online Summer 2018 dakota tracy | 8/1/18 7:30 PM Quiz: Quiz 6: Invento
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KU MGM351 Online Summer 2018 dakota tracy | 8/1/18 7:30 PM Quiz: Quiz 6: Inventory Management (Chapter 12) Time Ramaining 00.812 This Question: 1 pt 1 of 10 (0 complete) ? This Quiz: 10 pts possib Southeastern Bell stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 15,900 units Southeastern estimates its annual holding cost for this item to be $24 per unit. The cost to place and process an order from the supplier is $74. The company operates 300 days per year, and the lead time to receive an order from the supplier is 2 working days. a) What is the economic order quantity?units (round your response to the nearest whole number) b) What are the annual holding costs? s(round your response to the nearest whole number) o) What are the annual ordering costs? s (round your response to the nearest whole number) d) What is the reorder point?units (round your response to the nearest whole number) Enter your answer in each of the answer boxes.Explanation / Answer
We have D = 15900, S = 74, H = 24
a) EOQ is given by sqrt(2DS/H) or
EOQ = sqrt(2*15900*74/24) = 313.12
Rounding to nearest whole number we have 313 units.
b) Annual holding cost is provided by HQ/2. Hence we have 24*313/2 = 3756
c) Annual ordering cost is provided by DS/Q. Hence we have 15900*74/313 = 3759
d) Reorder point is given by (Demand/working days) * Lead time. Hence we have (15900/300)*2= 106 units
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