Respuesta :
Answer:
I. Annual ordering cost = $240
II. Annual carrying cost = $240
III. Total annual inventory cost = $480
Explanation:
We begin by listing out the data we were given, we have:
annual demand (D) = 1200, ordering cost (S) = $80 per order,
per unit cost (H) = $ 1.20, number of working days = 360 days,
lead time = 12 days
To calculate the economic order quantity we use the formula
economic order quantity = square root of [(2 * annual demand * the ordering cost) ÷ (per unit cost)]
Mathematically,
EOQ = [tex]\sqrt{2DS/H}[/tex]
where:
D = annual demand, S = ordering cost, H = unit cost
Substite the variables into the formula, we have:
EOQ = [tex]\sqrt{(2*1200*80)/1.2}[/tex]
EOQ = [tex]\sqrt{160000}[/tex] = 400
EOQ = 400 units
I. Annual ordering cost = annual demand * ordering cost ÷ order size
number of orders (Q) = annual demand ÷ order size = 1200/400 = 3 orders
Annual ordering cost = ordering cost * number of orders
Annual ordering cost = S * Q ⇒ 80 * 3
Annual ordering cost = $240
II. Annual carrying cost = average inventory * per unit cost
average inventory = EOQ ÷ 2
Annual carrying cost = (EOQ * H) ÷ 2
Annual carrying cost = 400 * 1.2 ÷ 2 = 240
Annual carrying cost = $240
Total annual inventory cost = Annual ordering cost + Annual carrying cost
Total annual inventory cost = $ (240 + 240)
Total annual inventory cost = $480
