8/18/2019 Lab Practice 1
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PRACTICE EXERCISE
Economic Order Quantity - PRACTICE EXERCISE SCM 300
Below are ome t!e "ey #i$ure im%ortant in your analyi&
Annual Per Unit Holding Costs are estimated at 30% of the
wholesale cost.
' ( )3000* ( +,000C ( +.0000S ( +/0000
in$ Preent 1ot Si2e Q ( ))004Calculate the time between orders?
Do Not ound.//0 wee"
How man! orders "er !ear are being "laced annuall!? Do Not
ound.
))5 Order %er year
According to the information su""lied# what is the "resent
annual in$entor! cost? ¬her words# using their "resent lot
si'e what is the annual in$entor! cost?( Also#se"aratel! identif!#
the annual cost of "urchasing the in$entor!# the annual holding
costAHC( and annual ordering cost A)C(.
'C ( + .6,006000 AOC ( + /67.7.7 A*C ( + 336000TC ( +
.6,3767.7.7
in$ t!e Economic Order Quantity Q(EOQ4Calculate *)+. U,* A -H)*
NU/*# N) D*C&/A,(*)+ 1 /),
Using the calculated *)+# How often will orders be "laced?
-ee2s.'O 8OT RO8' S!ow . decimal %lace4
),7 -ee2s
8/18/2019 Lab Practice 1
2/2
PRACTICE EXERCISE
According to the information su""lied# what would be the
annual in$entor! cost if the!used the calculated *)+? Also#
se"aratel! identif! the annual holding cost AHC( andannual ordering
cost A)C(.A*C ( + ).6/90AOC ( + ).6/90TC ( + .6,./6950
&f the! could order the *)+ instead of 00# how much would
this one store stand tosa$e annuall!?
+).67/7.5
)rders can onl! be ta2en in increments of 450 units. -hat would
be the a""ro"riate
order si'e? A. 450 units. 500 unitsC. 650 unitsD. 000
units
Answer not "ro$ided.
According to the a""ro"riate order si'e recommendation#
what would be the 7otal Annual &n$entor! cost? Also#
se"aratel! identif!# the annual cost of "urchasing thein$entor!#
the annual holding cost AHC( and annual ordering cost A)C(.
'C ( + .6,006000 A*C ( + ):6000
AOC ( + )06/00TC ( + .6,.:6/00
7herefore# the total annual sa$ings for this store using our
recommendation $ersus the "resent lotsi'e of 00# would be8
+ ).63.7.7
,u""ose this data was for one single store. Using sim"le
e9tra"olation# how much would this
com"an! stand to sa$e if the! had : other stores of e;ual
si'e?+)5/6909)0
