12.

14 (Thomas Kratzer)

Annual Demand : 6000 units/year Ordering Cost : $30 per order Carrying Cost = Holdin
Price : $100 demand for 1 week : 120 units Ordering Cos
Carrying Cost : $10 unit/year 250 working days/year
Setup Cost = $ 30 (D/Q)S = (Q/2)H
Holding Cost = $10

a)
⬚
Q*= 2𝐷𝑆/𝐻 Q*= 2(6000)(30)/10 Q*= 189,74

Optimal Order Quality is 189,74 units

b) Average Inventory if the EOQ used?

Avg. Inventory : Order Quantity / 2 = 189,74 / 2 = 94,87 Units

c) Optimal number of order per year?

N = D/Q* = 6000/189,74 = 31,62

d) Optimal Number of in between any two order?

T = number of working days/N = 250/31,62 = 7,9

e) Annual Cost of Ordering and holding Inventory?

Q x H = 189,74 x 10 = $1897,4

f) Total Inventory Cost = Annual Holding Cost + Annual Setup Cost

TC = P x D + (Q*/2)H + (D/Q*)S
TC = 100 x 6000 + (189,74/2) 10 + (6000/189,74)30 = $ 601.897
Carrying Cost = Holding Cost = Inventory Cost
Ordering Cost = Setup Cost