Respuesta :
Answer and Explanation:
For computing the additional cost and the percentage of the storage space first we have to determine the economic order quantity and the total cost which is shown below:
Economic order quantity
[tex]= \sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}[/tex]
[tex]= \sqrt{\frac{2\times \text{8,040}\times \text{\$10}}{\text{\$0.24}}}[/tex]
= 819 units
The annual demand is
= 670 per month × 12 months
= 8,070
And, the carrying cost is
= $2.40 × 10%
= $0.24
Now The total cost of ordering cost and carrying cost based on economic order quantity
= Annual ordering cost + Annual carrying cost
= Annual demand ÷ Economic order quantity × ordering cost per order + Economic order quantity ÷ 2 × carrying cost per unit
= 8,070 ÷ 819 × $10 + 819 ÷ 2 × $0.24
= $98.53 + $98.28
= $196.81
And, The total cost of ordering cost and carrying cost based on order size
= Annual ordering cost + Annual carrying cost
= Annual demand ÷ Economic order quantity × ordering cost per order + Economic order quantity ÷ 2 × carrying cost per unit
= 8,070 ÷ 2,000 × $10 +2,000 ÷ 2 × $0.24
= $40.35 + $240
= $280.35
So the cost saving is
= $280.35 - $196.81
= $83.54
And we Assume that 2,000 units occupied the 100% space
Hence, 1 unit will occupy
= 1 ÷ 2,000
= 0.05% of the space
Therefore in case of economic order quantity the percentage will occupy
= 819 × .05
= 40.95% of the space i.e 41%
And, in case saving of space is 59 in case of ordering of economic order quantity rather than order size i.e 2,000 units