Stat Question (Q15)?

Question

Assuming that the demand for a product is constant, find the Economic Order Quantity (EOQ) AND the Total Annual Inventory Cost given the following: A). Demand=330 per month. Order Costs= $30 per order. Stock Holding Costs= $10 per item per year. Unit Price= $150. B). Demand= 200 per week. Order Costs= $25 per order. Stock Holding Costs= 10% of average stock value per year. Unit Price= $36. C). Demand= 400 per day. Order Costs= $50 per order. Stock Holding Costs= $45 per 100 items per month (30 days). Unit Price= $99.
MUST Show ALL formulas, equations, computations (etc).

Answer 1

There truly is insufficient information to answer the question. For example the $10 per year inventory cost does not explain whether the inventory cost per day is 1/365th of the ten dollars or whether there is a ten dollar cost incurred for holding the item for one day. Inventory cost is more than the cost of money. It includes the cost of the facility used to store the maximum inventory.

Answer 2

I'm dizzy