Respuesta :
Answer:
a. 8 pounds
b. $3,744
c. 26 orders
d. 12 days
Explanation:
a. The computation of the economic order quantity is shown below:
= [tex]\sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}[/tex]
where,
Annual demand = 52 weeks × 4 pounds = 208 pounds
And, the other items values would remain the same
= [tex]\sqrt{\frac{2\times \text{208}\times \text{\$8}}{\text{\$52}}}[/tex]
= 8 pounds
b. For computing the total annual cost, the following calculations need to be done
The number of orders would be equal to
= Annual demand ÷ economic order quantity
= $208 ÷ 8 pounds
= 26 orders
The average inventory would equal to
= Economic order quantity ÷ 2
= 8 pounds ÷ 2
= 4 pounds
The total cost would be
= Item cost + ordering cost + carrying cost
where,
Item cost = 208 × $16 = $3,328
Ordering cost = Number of orders × ordering cost per order
= 26 orders × $8
= $208
Carrying cost = average inventory × carrying cost per unit
= 4 pounds × $52
= $208
So, the total would be
= $3,328 + $208 + $208
= $3,744
c. 26 orders explained in part b
d. The number of days between the orders
= 312 operating days ÷ 26 orders
= 12 days
