What is the economic order quantity for whatchamacallit

Assignment Help Operation Management

Reference no: EM131148811

Your monthly demand for the Whatchamacallit is 20,000 units. You estimate that your fixed ordering cost is $450 and the annual holding cost percentage is 15%. You sell each Whatchamacallit for $80, and your profit margin is $50 per unit. (Round order quantities to whole numbers and costs to 2 decimals.)

If you have a single warehouse to store the inventory, what is the economic order quantity (EOQ) for the Whatchamacallit? What is the total annual cost (holding + setup)?

Now suppose you have four warehouses across the country, and the total demand is equally distributed among the four warehouses. Each warehouse has the same fixed ordering cost and annual holding cost percentage as the warehouse in (a). What is the EOQ at each warehouse (hint: it should be the same for all four warehouses)? What is the annual cost (holding + setup) at each warehouse? What is the annual company cost (holding + setup)?

Reference no: EM131148811

Questions Cloud

What are your suggested nonpricing strategies : Besides your pricing decisions, what are your suggested nonpricing strategies? What nonpricing strategies will you use to increase barriers to entry?

What is the optimal order quantity : Suppose that MW Inc. has a production rate of 450,000 units per year, and a daily demand of 1500 units on each working day (assume 250 working days per year). They estimate that is costs $140 to setup for each production run, and the holding cost per..

Organisational behaviour concepts and human resource process : Explain the strategic relationship between organisational behaviour concepts and human resource processes.

Misconceptions about psychological disorders : For centuries, people have believed myths and misconceptions about psychological disorders and the people who suffer from them. Modern psychological research has allowed us to correct some of these misconceptions

What is the economic order quantity for whatchamacallit : Your monthly demand for the Whatchamacallit is 20,000 units. You estimate that your fixed ordering cost is $450 and the annual holding cost percentage is 15%. You sell each Whatchamacallit for $80, and your profit margin is $50 per unit. If you have ..

Explain how to operationalise : Select one organisational behaviour concept and explain how to operationalise it through an additional human resource process other than the one(s) it is linked to in the matrix.

What factors do you think affecting this team cohesiveness : As a team member, what would you do? Should the three members of the team confront Fitzgerald with their concerns? Should they inform Kurt Lansing? Explain your answers.

Explain relationship between the price elasticity of demand : Explain the relationship between the price elasticity of demand and total revenue. What are the impacts of various forms of elasticities (elastic, inelastic, unit elastic, etc.) on business decisions and strategies to maximize profit?

Knowledge and understanding about the key logistics : produce materials that would be presented to your boss/leader demonstrating your knowledge and understanding about the key logistics and supply chain issues.

User Account

All Pages