Respuesta :
Answer:
Explanation:
a. The computation of the economic order quantity is shown below:
= [tex]\sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}[/tex]
= [tex]\sqrt{\frac{2\times \text{1,215}\times \text{\$10}}{\text{\$75}}}[/tex]
= 18 bags
b. The average inventory would equal to
= Economic order quantity ÷ 2
= 18 bags ÷ 2
= 9 bags
c. The number of orders would be equal to
= Annual demand ÷ economic order quantity
= $1215 ÷ 18 bags
= 67.5 orders
d. The total cost of ordering cost and carrying cost equals to
Ordering cost = Number of orders × ordering cost per order
= 67.5 orders × $10
= $675
Carrying cost = average inventory × carrying cost per unit
= 9 bags × $75
= $675
So, the total would be
= $675 + $675
= $1,350
Now if holding cost is increased by $9, the holding cost would be 84
So,
a. The computation of the economic order quantity is shown below:
= [tex]\sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}[/tex]
= [tex]\sqrt{\frac{2\times \text{1,215}\times \text{\$10}}{\text{\$84}}}[/tex]
= 17 bags
b. The average inventory would equal to
= Economic order quantity ÷ 2
= 17 bags ÷ 2
= 8.5 bags
c. The number of orders would be equal to
= Annual demand ÷ economic order quantity
= $1215 ÷ 17 bags
= 71.47 orders
d. The total cost of ordering cost and carrying cost equals to
Ordering cost = Number of orders × ordering cost per order
= 71.47 orders × $10
= $714.70
Carrying cost = average inventory × carrying cost per unit
= 8.5 bags × $84
= $714
So, the total would be
= $714.70 + $714
= $1,428.70
So, it would increase by
= $1,428.70 - $1,350
= $78.70
