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  • Southeast Bell Solution

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    Humphrey Osaigbe
    16 views2 pages
    The document provides calculations to determine inventory costs for Southeastern Bell's switch inventory. It calculates that the economic order quantity is 300 switches, the annual holding costs are $3,750, the annual ordering costs are also $3,750, and the reorder point is 100 switches.

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    Operations Management Inventory Management

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    The document provides calculations to determine inventory costs for Southeastern Bell's switch inventory. It calculates that the economic order quantity is 300 switches, the annual holding costs are $3,750, the annual ordering costs are also $3,750, and the reorder point is 100 switches.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    16 views2 pages

    Southeast Bell Solution

    Uploaded by

    Humphrey Osaigbe
    The document provides calculations to determine inventory costs for Southeastern Bell's switch inventory. It calculates that the economic order quantity is 300 switches, the annual holding costs are $3,750, the annual ordering costs are also $3,750, and the reorder point is 100 switches.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    Southeastern Bell

    D= 15,000
    H= 25
    S= 75
    Wd = 300
    L= 2

    a Find the economic order quantity


    √(2𝐷𝑆/𝐻)
    EOQ =

    √((2 (15,000)75)/25)
    EOQ =

    EOQ =√90,000

    EOQ = 300 switches

    b Find the annual holding costs


    �/2 (𝐻)
    TH =
    300/2 (25)

    TH = 3,750 switches

    c Find the annual ordering costs


    𝐷/Q (𝑆)
    Ts =

    15,000/300 (75)
    Ts =

    Ts = 3,750 switches

    d What is the reorder point


    ROP = ⅆ�+𝑠𝑠

    ROP = 100 switches

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