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Mgt 608 week 3 eoq activity

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Economic Order Quantity Compute the necessary values below to find the MOST economical qu Demand = 13,000 Annual Requirements or Demand, in units Cost per item = $ 160.00 Purchase cost per Unit A = $ 2,080,000 Annual Usage, in dollars B= $ 115.00 Administrative costs per order of placing the order C= 28% Carrying costs of the inventory (expressed as an annual percentage of t EOQ value = $ 41,334.87 (exact value) EOQ units = 259.000 (rounded number) Using this CONTINUIOUS inventory management system, every time that you need t Next, compute the following values using the EOQ units (rounded into whole items, as above) Annual Ordering Cost = $ 5,772.20 in dollars Annual Inventory Holding Cost = $ 5,801.60 in dollars TOTAL Annual Cost = $ 11,573.80 in dollars Why are the Ordering Cost and Holding Cost not exactly equal, as This is due to the units being rounded to get a whole number of units. seen on the chart? When to order is another question…. See the next assignment to compute the Reorder Point. mpute the necessary values below to find the MOST economical quantity to order! nual Requirements or Demand, in units rchase cost per Unit nual Usage, in dollars ministrative costs per order of placing the order rrying costs of the inventory (expressed as an annual percentage of the inventory dollar value) See formula at bottom of this page. unded number) NUIOUS inventory management system, every time that you need to order this item, you buy EOQ of them! (rounded into wh ...
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