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What is the economic order quantity for bats

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Reference no: EM131050036

The Toledo Mudhens, a minor league baseball team, breaks an average of seven bats per week during a 38 week season. The team purchases it bats from a national supplier. The order cost is $185 and the annual holding cost is 24 percent of the purchase price.

  1. What is the annual demand for bats?
  2. If bats cost $25.00 each, what is the economic order quantity for bats?
  3. What is the total annual cost associated with the EOQ quantity?
  4. What impact will an increase to $295 in the order cost have on the EOQ quantity?
  5. Suppose the Mudhens break an average of 9 bats per week during the season, what impact will this have on the EOQ quantity? (Assume the order cost is $175)

Assume the bat manufacturer offers the Mudhens the following price schedule

Order Quantity                     Price per Unit

1 - 49                                 $25.00

50 - 143                                $24.00

144 or more                            $23.50

  1. How many bats should the team order if the discount applies to all units?
  2. What is the total annual cost associated with the best order quantity?

Reference no: EM131050036

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