Compute the total relevant cost associated with the eoq, Operation Management

Assignment Help:

The local technology store WiredIn hired you to manage their inventory, which consists of 2 products configurations, type L and type J. Below are the data for the products. The holding cost is 24% of the unit costs. Product Type L Type J Demand per year 48000 (units) 72000 (units) Unit Cost $50 $85 Ordering Cost $125/order $125/order A. Use the economic order quantity model to determine the order size for both products. B. Calculate the total relevant cost associated with the EOQ calculated in part (A) C. Assume that the real ordering cost is $200 instead of $125. How large are the additional relevant costs incurred by the bad estimate of the ordering cost for Type J? D. If WiredIn chooses to order 1300 of Type L instead of the EOQ, calculate the percentage cost error of this order size. E. Calculate the best order quantity for Type J assuming that WiredIn gets a 40 percent discount on the entire order if they order more than 1500 units. F. Assume that each unit occupies 0.10 cubic foot of space, for which WiredIn figures it costs them $2 per year per cubic foot. Calculate the best order quantity under these circumstances for Type L (assuming no quantity discounts in this part of the question). G. One of the managers is trying to understand the reasons for the high cost of ordering. He wonders how low the ordering cost (A) must become for the EOQ to equal one unit. What is your response for Type L? (assuming no quantity discounts and no space costs)


Related Discussions:- Compute the total relevant cost associated with the eoq

Process capability index - asymmetrical positioning, Process Capability Ind...

Process Capability Index - Asymmetrical Positioning of the Process As stated earlier, the C p index assumes that the process mean is centred within the tolerance band, but, i

Describe the company''s strategic goals, At the conclusion of Baidu's final...

At the conclusion of Baidu's final strategic planning session, Robin Li (Cofounder, Chairman, and CEO) assigned you to prepare a written report and announcement that would be prese

Explain what is the best production order quantity, Johnson Plastics makes ...

Johnson Plastics makes and sells, among many other things, specialty plastic display cases for retail stores. Johnson's expected demand for the display cases is 1,000 units, and av

Define sociotechnical systems theory, Discuss sociotechnical systems theory...

Discuss sociotechnical systems theory and contrast it with the open systems theories of organization development?

Describe worker adjustment and retraining notification act, Outline the pro...

Outline the provisions of the Worker Adjustment and Retraining Notification Act (WARN) of 1988 stating its rules, liabilities, and loopholes. Discuss the reasons why this act was c

Depict a sequence diagram, Hertford Post Office Situation: Hertford has a t...

Hertford Post Office Situation: Hertford has a typical small town post office that sells stamps, rents post office boxes, and delivers mail to postal customers. a. Identify possibl

Define what is the sample value of the test statistic, 1. The average laten...

1. The average lateness for one of the top airline companies is 10 minutes. The Standard Deviation of the lateness measure is calculated as 3. An airplane arrived 8.5 minutes after

Explain break even analysis, Explain Break Even Analysis. Break Even A...

Explain Break Even Analysis. Break Even Analysis: This Analysis implies that at several points in the operations, total revenue equivalent total cost. This analysis is concer

Explain internet for marketing communications, How you Google's do expected...

How you Google's do expected dominance of the online display advertising market will affect marketers who already use the Internet for marketing communications? Will its push into

Countries that are leading the export import of merchandise, The wtos intl ...

The wtos intl trade statistics is an annual report that provides comprehensive comparable updated statistics on trade in merchandise and commercial services. This report allows for

Write Your Message!

Captcha
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