The weekly requirement of a part is 5910 units the order, Ask an Expert

Management Studies

The weekly requirement of a part is 5910 units. The order cost is $260 per order. The holding cost is $10 per unit per year, and the part cost is $850 per unit. The firm operates fifty-two weeks per year.

1. Calculate the following - Economic order quantity, annual holding cost, annual order cost and the annual purchase cost, and inventory turns per year

2. Suppose the firm is currently ordering once every six weeks. How much can the company save per year by using economic order quantity instead of ordering once every six weeks?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M91899871

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