What is the economic order quantity for the product

Assignment Help Operation Management
Reference no: EM131728886

You are a purchasing manager for your company. You know that your monthly demand is 20,000 units. You estimate that your fixed ordering cost is $450 and the annual holding cost percentage is 15%. You sell the product for $80 and each unit is marked up $50 from the unit cost. (Round order quantities to whole numbers and cost values to 2 decimals)

(1) If you have one warehouse to store the inventory

a. What is the economic order quantity (EOQ) for the product?

b. What is the annual total cost (holding and setup) for having one warehouse?

Reference no: EM131728886

Questions Cloud

Write about facebook and their whole strategic plan : In five pages, write about Facebook and their whole strategic plan.
Frazier a beneficiary of effective mentoring and coaching : Based on your findings, is Mr. Frazier a beneficiary of effective mentoring and coaching?
Sells numerous products with various patriotic themes : You take a job working for American Freedom First, a company that sells numerous products with various patriotic themes.
Prohibits players from anchoring their putters to chests : The U.S. Golf Association put a new rule (effective January 1, 2016) that prohibits players from anchoring their putters to their chests.
What is the economic order quantity for the product : What is the economic order quantity (EOQ) for the product?
Discuss the importance of widespread incentives : Based on the Sodexo example, discuss the importance of widespread incentives in improving both the culture and employee retention efforts in a firm.
Statements is true of the hotel chain hiring policy : Which of the following statements is true of the hotel chain's hiring policy?
About the leadership leverage : The top managers are very busy people. Why was it necessary to involve them in leadership leverage?
Foster a habit of composing sloppy messages : Tweeting, texting, and e-mailing all may foster a habit of composing sloppy messages.

Reviews

Write a Review

Operation Management Questions & Answers

  Compare and contrast the major classification methodologies

Compare and contrast the major classification methodologies. In your discussion, be sure to address the requirements different classification methodologies pose

  Use in fiber-optic cable communications system

Two-alternative components are being considered for use in a fiber-optic cable communications system. One component has a unit cost of $840 and a Weibull failure distribution with β=2 and θ=10,000 hr. Any component failure will require a replacement ..

  Calculate the normal time for each of the work elements

Calculate the normal time for each of the work elements - Calculate the average annual transportation inventory when sending the art via transoceanic ship freight service.

  Motivation can come from many different places

Motivation can come from many different places. Some people like to listen to music before and athletic event to get “pumped up.” Other people like to quote a phrase as a reminder why they are putting themselves through this ordeal. Money is a popula..

  Consider real estate and who owns property of deceased

Why is possession not the law of 'who owns what' in our legal system or how does our system of property law support commerce? (Consider real estate and/or who owns property of deceased).

  Examine how they track the various products

Contact a waste management company. Examine how they track the various products that they pick up from corporate customers, not just individual or home customers. Examine why that company for that region or location or some group of customers does no..

  Candidates leadership ability based on trait approach

Analyze each candidate’s leadership ability based on a trait approach, a style approach, and a contingency approach.

  Understanding of kohlbergs theory

From any stage of development show your understanding of Kohlberg's Theory

  Describe the different theoretical research models

Identify and describe the different theoretical research models that are of great help to address adverse events in health services organizations. College answer not a Copy Paste please the class is Research Methods in Health Services Managment.

  Find out the hospital procedure for overnights

Marilyn's 5-year-old daughter has the flu and needs to be admitted to the hospital for dehydration. Marilyn wants to stay overnight with her in the hospital, but the head nurse refuses her request. When Marilyn comes to you for help, you find out the..

  Why is staffing important and who is responsible for it

Why is staffing important? Who is responsible for it? Is it a function of personnel/human resource departments? What are some of the ways managers can adapt to changes in the external environment (shrinking work force, impacts of technology, etc.)..

  Which of the four forecasting methods is best

The director of medical services predicted 6 years ago that demand in year 1 would be 41 surgeries. Use exponential smoothing, first with a smoothing constant of .6 and then with one of .9, to develop forecasts for years 2 through 6. With MAD as the..

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