How many times the company should place orders in a year

Assignment Help Supply Chain Management

Reference no: EM133412128

Question: Costco has received the following demands for a product this year:
Month 1 2 3 4 5 6 7 8 9 10 11 12

Demand 300 700 800 900 3300 200 600 900 200 300 1000 800

Suppose ordering cost (OC) is $504 and holding cost (HC) of one unit of product in a year is $3. There is no shortage cost. Backordering is not allowed in this model.

To achieve the minimum total cost (ordering cost + holding cost), how many times the company should place orders in a year? In each order, how many products should be ordered? What is the total cost in a year?

Given that the total demand of the whole year is 10,000 products, suppose the company is going to use the EOQ

model for the accumulated demand of one year (10,000). In other words, ignore the monthly demand. Compute: 1

• Optimal order quantity (Q*) • Total cost
• Frequency of orders
• Time between orders

Reference no: EM133412128

Questions Cloud

How many products should be ordered : Develop a schedule to show when and how many products should be ordered, and compute the total cost

How can racial stereotypes harm societies, as well as groups : Have you ever experienced being stereotyped because of your race or ethnicity? Why or why not? How can racial stereotypes harm societies, as well as groups

What is a process flow study with examples : Draw a basic business flow. What is a process flow study with examples? What is process flow methodology

Reported on problematic ways video games : The New York Times reported on the problematic ways video games were shaping young minds during the Covid-19 pandemic.

How many times the company should place orders in a year : How many times the company should place orders in a year? In each order, how many products should be ordered? What is the total cost in a year

Explain how team learning and shared vision : Explain how team learning and shared vision provide a foundation for engaging in or strengthening systems thinking.

Differences in american and french value systems : What differences in American and French value systems might be at the root of the difficulties Chalon is facing as he implements a new strategy?

Describe how the morality and ethics : Describe how the morality and ethics of those participating in various media outlets might have an impact on your life.

Identify strategies that can improve performance : Identify strategies that can improve performance in an organization. Align performance initiatives with the mission, vision, and values of an organization.

User Account

All Pages