DOGGE Ltd has annual demand of 50,000 desks and the purchase price of each desk is K250. There are ordering costs of K200 for each order placed. Inventory holding costs amount to 10% per year of inventory value. Calculate the inventory costs p.a. for the following order quantities, and plot them on a graph: 500 units, 750 units, 1000 units, 1250 units b) Using the information in (a) above calculate i) Economic Order Quantity and the total inventory costs for this order quantity.
DOGGE Ltd has annual demand of 50,000 desks and the purchase price of each desk is K250. There are ordering costs of K200 for each order placed. Inventory holding costs amount to 10% per year of inventory value. Calculate the inventory costs p.a. for the following order quantities, and plot them on a graph: 500 units, 750 units, 1000 units, 1250 units b) Using the information in (a) above calculate i) Economic Order Quantity and the total inventory costs for this order quantity.
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...
Related questions
Question
DOGGE Ltd has annual demand of 50,000 desks and the purchase price of each desk is K250. There are ordering costs of K200 for each order placed. Inventory holding costs amount to 10% per year of inventory value.
Calculate the inventory costs p.a. for the following order quantities, and plot them on a graph:
500 units, 750 units, 1000 units, 1250 units
b) Using the information in (a) above calculate
i) Economic Order Quantity and the total inventory costs for this order quantity.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Recommended textbooks for you
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.