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What is the economic order quantity and holding cost

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An automobile manufacturer plans to produce 40,000 cars in the next year. All cars planned for production use the same cockpits. The purchasing agent wants to know how many units to buy at one time. Historically, cockpits have been received two days (lead time) after they were ordered. It costs 26 to order, and the holding-cost fraction used by the auto company is 29% per year. The cockpits cost 73 each.

What is the Economic Order Quantity?

What is the number of orders per year?

What is the frequency of orders? Assume the company works 365 days a year.

What is the reorder point?

The company works with a safety stock of 3 days. What is the level of this stock?

What is the Average stock?

What is the total holding cost?

What is the total ordering cost?

What is the total cost of stock management?

Draw the evolution of stock in time.

using excel or just the working out

Reference no: EM132272812

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