Answered: a. What is the EOQ? (Round your answer…

a. What is the EOQ? (Round your answer to a whole number.) EOQ b. How many times per year does the store reorder? (Round your answer to two decimal points.) Number of Orders per Year

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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Question

A local distributor for a national tire company expects to sell approximately 8,630 tires of a certain size and tread design next year.
Annual carrying cost is $15 per tire and ordering cost is $83. The distributor operates 280 days a year.
a. What is the EOQ? (Round your answer to a whole number.)
ЕOQ
b. How many times per year does the store reorder? (Round your answer to two decimal points.)
Number of Orders per Year

c. What is the length of an order cycle? (Round your answer to two decimal points.)
Length of Order Cycle
d. What will the total annual carrying and ordering cost be if the EOQ quantity is ordered? (Round your answer to a whole number.)
Total Annual Inventory Cost

Expert Solution

Step 1

Since you have posted a question with multiple sub-parts, we will solve the first three subparts for you. To get the remaining sub-part solved please repost the complete question and mention the sub-parts to be solved.

The economic order quantity (EOQ) refers to the quantity of the ideal order size for a company. This saves the company to overspend on the inventories. This also keeps track of the inventories of the company and new inventory is manufactured or produced when the inventory reached its lower limit.

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