AS 2021

Cass business school

AS

### Question Description

I need support with this Probability question so I can learn better.

If you can do, please quickly solve for me.

This is about Decision Analysis for test.

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## Final Answer

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Running head: ANSWERS TO QUESTIONS

Answers to questions:

Name:

Institution affiliation:

Date:

1

ANSWERS TO QUESTIONS

a)

b)

c)

d)

e)

I.

II.

III.

IV.

V.

f)

g)

h)

2

Question 1

Economic order quantity= ((2x annual demand x cost per order)/holding cost per unit per

year)^0.5

EOQ= ((2*5000*(20+30)/2) ^0.5= 500

Number of orders= 5000/500=10

Time between orders= 50/10= 5 weeks

Annual cost of ordering= no. of orders placed in a year x cost per order= 10 orders*(20+30)=

$500

Annual cost of holding stock=Average units × Holding cost per unit= 500/2 * 2= $500

Assumptions made when deriving EOQ

Total units to be consumed during the period is known with certainty.

The total ordering cost remains unchanged throughout the period.

The inventory cost remains unchanged throughout the period.

There are no quantity discounts available.

The whole quantity of ordered inventory is delivered in one batch.

Total inventory cost when order quantity is 500

=Ordering Cost+ h...