What is economic order quantity-holding and ordering costing

Assignment Help Operation Management
Reference no: EM13781679

A produce distributor uses 1,200 packing crates a month, and each crate is purchased at a cost of $16. The manager has assigned an annual carrying cost of 20 percent of the purchase price per crate. Ordering costs are $40. Currently the manager orders once a month.

a) What is the Economic Order Quantity (EOQ) for this product?

b) How much could the firm save annually in total holding and ordering costs by ordering at the EOQ level? (Show the computations for the ordering, carrying and total holding and ordering costs in detail)

c) What would the net change (with its direction) in the ordering cost be by ordering at the EOQ level?

d) What would the net change (with its direction) in the carrying cost be by ordering at the EOQ level?

Reference no: EM13781679

The higher the supply chain profitability

"The objective of every supply chain should be to maximize the overall value generated." The value generated is "supply chain surplus." "The higher the supply chain profitabil

National collegiate athletic association

The National Collegiate Athletic Association (NCAA) is a nonprofit corporation organized in the State of Indiana. The NCAA conducts several championship events throughout the

Describe potential logistics social responsibility dimension

Describe some potential logistics social responsibility dimensions. What are some ways in which the Transportation Security Administration is attempting to improve the securit

Determine increase in the average value of a loyal customer

A computer manufacturer currently has a 15 percent customer defection rate. Their accounting department estimates the incremental contribution to profit and overhead as 30 p

Full implementation of the affordable care act

As a Human Resources manager for a mid-sized company in your area, you have been tasked with purchasing the best group health insurance for your organization. Analyze at least

What kind of organizational design

Case Question 1: If you were hired to advise Michael Jeffries on A & F's current organizational design, what weaknesses and potential threats would you identify? What streng

Contractor has higher salary levels and overhead rates

Two contractors decide to enter into a joint venture on a project. What difficulties can occur if the contractors have decided on who does what work, but changes may take plac

Discuss key legal or ethical issue affecting health care

Key efforts and protocols for ensuring compliance of health care organization in a changing regulatory and economic health care environment Once you have pinpointed at least

Reviews

Write a Review

 
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd