In problem 15.1, if the annual carrying cost is 18% per unit, what will be the annual savings in carrying cost? (15.1) A company carries 10 items in stock, each with an economic order quantity of $20,000. Through a program of component standardization, the 10 items are reduced to 5. The total annual demand is the same, but the annual demand for each item is twice what it was before. In Chapter 10, we learned that the economic order quantity varies as the square root of the annual demand. Since the annual demand for each item is now doubled, calculate: a. The new EOQ. b. The total average inventory before standardization. c. The total average inventory after standardization.

In problem 15.1, if the annual carrying cost is 18% per unit, what will be the annual savings in carrying cost? (15.1) A company carries 10 items in stock, each with an economic order quantity of $20,000. Through a program of component standardization, the 10 items are reduced to 5. The total annual demand is the same, but the annual demand for each item is twice what it was before. In Chapter 10, we learned that the economic order quantity varies as the square root of the annual demand. Since the annual demand for each item is now doubled, calculate: a. The new EOQ. b. The total average inventory before standardization. c. The total average inventory after standardization.

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Description: In problem 15.1, if the annual carrying cost is 18% per unit, what will be the annual savings in carrying cost? (15.1) A company carries 10 items in stock, each with an economic order quantity of $20,000. Through a program of component standardizatio

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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