Given the following information: Annual sales in units40,000Cost of placing an order$58.00Per-unit carrying costs$2.30Existing units of safety stock600 What is the EOQ? Round your answer to the nearest whole number. unitsWhat is the average inventory based on the EOQ and the existing safety stock? Use the rounded value of the EOQ from the previous question in your calculations. Round your answer to the nearest whole number. unitsWhat is the maximum level of inventory? Use the rounded value of the EOQ from the previous questions in your calculations. Round your answer to the nearest whole number. unitsHow many orders are placed each year? Use the rounded value of the EOQ from the previous questions in your calculations. Round your answer to the nearest whole number. orders per year

To solve this problem, we need to use the Economic Order Quantity (EOQ) formula and then calculate…

Answered: Given the following information:…

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 7E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...

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Question

Given the following information:

Annual sales in units	40,000
Cost of placing an order	$58.00
Per-unit carrying costs	$2.30
Existing units of safety stock	600

What is the EOQ? Round your answer to the nearest whole number.

units
What is the average inventory based on the EOQ and the existing safety stock? Use the rounded value of the EOQ from the previous question in your calculations. Round your answer to the nearest whole number.

units
What is the maximum level of inventory? Use the rounded value of the EOQ from the previous questions in your calculations. Round your answer to the nearest whole number.

units
How many orders are placed each year? Use the rounded value of the EOQ from the previous questions in your calculations. Round your answer to the nearest whole number.

orders per year