Solve the below EOQ example. Phone company had the following demand profile and related holding and set up costs: $0.75 in holding costs per unit = H Demand rate of 10,000 per year = D Set up cost of $500 = S What is the EOQ? How many orders they need to make in a year (365 days)? What is the cycle time between the orders?
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Solve the below EOQ example.
Phone company had the following demand profile and related holding and set up costs:
- $0.75 in holding costs per unit = H
- Demand rate of 10,000 per year = D
- Set up cost of $500 = S
What is the EOQ?
How many orders they need to make in a year (365 days)?
What is the cycle time between the orders?
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- Need help understanding how to apply the EOQ to the below example... The Metropolitan Bus Company (MBC) purchases diesel fuel from American Petroleum Supply. In addition to the fuel cost, American Petroleum Supply charges MBC $1500 per order to cover the expenses of delivering and transferring the fuel to MBC’s storage tanks. The cost of holding a gallon of fuel in the storage tank is $200 per gallon, per month; and annual fuel usage is 125,000 gallons. (a) What is the optimal order quantity for MBC? (b) Assuming 300 work days per year, how frequently should MBC order to replenish the gasoline supply 2 decimal places)? (c) How long is the optimal cycle length (in days)? (d) Determine the optimal variable annual cost (nearest dollar). (e) The MBC storage tanks have a capacity of 500 gallons. What would be the variable annual cost if MBC fills the tanks completely each time, they place an order (nearest dollar)?Economic Order Quantity and Reorder PointFind the economic order quantity and the reorder point, givenAnnual demand ( D )= 1, 000 unitsAverage daily demand ( d¯ ) = 1, 000 ∕365ordering cost ( S ) = $5 per orde rHolding cost ( H ) = $1.25 per unit per yearLead time ( L ) = 5 daysCost per unit ( C ) =$12.50What quantity should be ordered?The annual demand for the Super Thrive brand plant food manufactured by Cumberbatch and Dunst Indoor Plants Company is 120,000 pounds. The annual holding cost (also known as carrying charge) is $0.05 per pound, and Operations Manager Kirsten Benedict has calculated the cost of setting up machinery for making the plant food to be $20. What is the economic order quantity (EOQ) based on the information provided? (Round the EOQ to the next whole number).
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- Ergonomics Inc. sells ergonomically designed office chairs. The company has the following information: Average demand = 36 units per day Average lead time = 50 days Item unit cost = $70 for orders of less than 400 units Item unit cost = $68 for orders of 400 units or more Ordering cost = $45 Inventory carrying cost = 25% The business year is 250 days Assume there is no uncertainty at all about the demand or the lead time. Calculate EOQ if unit cost is $70 and $68. (Note: These EOQs do not need to be feasible in theirprice range.) (Round up your answers to the next whole number.) EOQ Unit cost at $70 units Unit cost at $68 units Calculate annual ordering costs for each alternative? (For the first value, use your rounded EOQ from Part a. For the second value, use the lowest feasible order quantity needed to qualify for that price level. Round your answers to 2 decimal places.) Annual Ordering Cost Unit cost at $70 Unit…The following information regarding inventory policy was assembled by the GB Inc. The company uses a 50-week year in all calculations: Sales: 10,000 units per year Order quantity: 2,000 units Safety stock: 1,300 units Lead time: 4 weeks The reorder point is: 3,300 units 2,100 units 100 units 1,300 unitsplease Solve question G,H AND I Question A to F IS SOLVED (a) What is the expected jet fuel yearly average demand D? =4160 tons(b) Given D, find the order lot size Q that gives the economic order quantity (EOQ). =60.39 unit(c) Given the EOQ, what is the total inventory holding cost?= $1067695.2(d) Given the EOQ, what is the total inventory ordering cost? =OC=$1067726.4(e) Given the EOQ, what is the total annual inventory cost?TIC=2135421.6 =1.32(f) What is the time between orders in weeks? = 39.39 The airport is convinced that placing an order every season (every P = 13weeks) will be best. It is also aware that the expected demand will varywith a standard deviation of 20 tons, so it needs to take this information into account. (g) What is the protection period required by the proposed 13-week periodic review system?(h) The airport is required by the airlines to maintain a 99.75% service level.What is the required safety stock?(i) Calculate the order size (Q) when using P = 13.(j)…