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A supplier sells Hipoint-brand pens to stationary shops. The annual demand is approximately 24,000 pens. The supplier pays SR5 for each pen and estimates that the annual holding cost is 30 percent of the pen's value. It costs approximately SR350 to place an order. The supplier currently buys 1000 pens per order Determine the annual ordering and inventory cost (in SR) for current order quantity. Determine the economic order quantity (EOQ). Determine the total annual cost for the EOQ i. ii. iii.

A supplier sells Hipoint-brand pens to stationary shops. The annual demand is approximately 24,000 pens. The supplier pays SR5 for each pen and estimates that the annual holding cost is 30 percent of the pen's value. It costs approximately SR350 to place an order. The supplier currently buys 1000 pens per order Determine the annual ordering and inventory cost (in SR) for current order quantity. Determine the economic order quantity (EOQ). Determine the total annual cost for the EOQ i. ii. iii.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Question 4
An electronics shop sells 6000 headphones in a year and the sales is relatively constant
throughout the year. These headphones are purchased for SR 20.00 each, and the lead
time is three days. The holding cost per headphone per year is 10% of the unit cost and
the ordering cost per order is SR 75. There are 300 working days per year. Calculate the
following:
(i) What is the annual holding cost?
(ii) In minimizing the cost, how many orders would be made each year?
(iii) Given the EOQ, what is the total annual inventory cost (including purchase cost)?
(iv) What is the time between orders?
(v) What is the ROP?

Question 3: A supplier sells Hipoint-brand pens to stationary shops. The annual demand is approximately 24,000 pens. The supplier pays SR5 for each pen and estimates that the annual holding cost is 30 percent of the pen's value. It costs approximately SR350 to place an order. The supplier currently buys 1000 pens per order i. Determine the annual ordering and inventory cost (in SR) for current order quantity. Determine the economic order quantity (EOQ). Determine the total annual cost for the EOQ ii. iii. Question 4 An electronics shop sells 6000 headphones in a year and the sales is relatively constant throughout the year. These headphones are purchased for SR 20.00 each, and the lead time is three days. The holding cost per headphone per year is 10% of the unit cost and the ordering cost per order is SR 75. There are 300 working days per year. Calculate the following: (i) What is the annual holding cost? (ii) In minimizing the cost, how many orders would be made each year? (iii) Given the EOQ, what is the total annual inventory cost (including purchase cost)? (iv) What is the time between orders? (v) What is the ROP?
Transcribed Image Text:Question 3: A supplier sells Hipoint-brand pens to stationary shops. The annual demand is approximately 24,000 pens. The supplier pays SR5 for each pen and estimates that the annual holding cost is 30 percent of the pen's value. It costs approximately SR350 to place an order. The supplier currently buys 1000 pens per order i. Determine the annual ordering and inventory cost (in SR) for current order quantity. Determine the economic order quantity (EOQ). Determine the total annual cost for the EOQ ii. iii. Question 4 An electronics shop sells 6000 headphones in a year and the sales is relatively constant throughout the year. These headphones are purchased for SR 20.00 each, and the lead time is three days. The holding cost per headphone per year is 10% of the unit cost and the ordering cost per order is SR 75. There are 300 working days per year. Calculate the following: (i) What is the annual holding cost? (ii) In minimizing the cost, how many orders would be made each year? (iii) Given the EOQ, what is the total annual inventory cost (including purchase cost)? (iv) What is the time between orders? (v) What is the ROP?
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