What is the annual holding and ordering costs


Question: Please show your calculations and always round answers to FOUR decimal place.

An appliance store carries a certain brand of TV which has he following characteristics:

Average daily demand                       2 units
Ordering cost                                    $25 per order
Carrying Cost                                   35% of unit cost per year
Unit cost                                           $400 per unit
Average Lead time                            4 days
Standard deviation of daily demand    0.8 unit
Standard deviation of lead time          0.6 days

The firm currently orders the product 85 units at a time and operates 250 days a year.

A) With the current lot-size policy, what is the annual holding and ordering costs?

B) With the current lot size, what is the average time (in days) between orders?

C) Calculate EOQ for the TVS.

Solution Preview :

Prepared by a verified Expert
Other Management: What is the annual holding and ordering costs
Reference No:- TGS01443324

Now Priced at $25 (50% Discount)

Recommended (92%)

Rated (4.4/5)