For this item, you are asked to calculate the EOQ – Economic Order Quantity. A good...

For this item, you are asked to calculate the EOQ – Economic Order Quantity. A good place to start is by watching this week’s video.
When determining the numbers for the variables needed to perform the calculation, be realistic. Research what the actual numbers could be and provide an explanation/rationale for choosing the numbers.
Perform the calculation and explain what the result means to your business.

Expert Solution

I have perfromed the calculation for the business I am in, at my end. Please use this solution as a framework to come up with your answer.

While choosing the costs to be included, please choose only the relevant and incremental costs.

I will now give you an example. You may use the same figures but please change the context at your end.

jeff jeffy answered 2 years ago

Consider a basic economic order quantity (EOQ) model with the following characteristics: Item cost: $15 Item...

Consider a basic economic order quantity (EOQ) model with the following characteristics: Item cost: $15 Item selling price: $20 Monthly demand: 500 units (constant) Annual holding cost: $1.35 per unit Cost per order: $18 Order lead time: 5 working days Firm's work year: 300 days (50 weeks @ 6 days per week) Safety stock: 15% of monthly demand For this problem, determine the values of: Q* the optimal order quantity and reorder point. Select one: a. 400 and 100 b....

In inventory management, economic order quantity (EOQ) is the order quantity that minimizes the total holding...

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Economic Order Quantity (EOQ) is the order quantity that minimizes the total holding costs and ordering...

Economic Order Quantity (EOQ) is the order quantity that minimizes the total holding costs and ordering costs. 1) What's the impact of a positive lead time on EOQ? 2) Can supply chain managers in fast-fashion industries apply the EOQ model to manage their inventories? If yes, how? If no, why?

1. A. (EOQ) Calculate the EOQ quantity given: a. Fixed cost per order of $40 b....

1. A. (EOQ) Calculate the EOQ quantity given: a. Fixed cost per order of $40 b. holding cost per inventory unit of $2.00 c. estimated demand for inventory of 200,000 Solve EOQ using the information listed above: B. Calculate the total cost associated the EOQ amount calculated in part A: C. The company wants to keep Safety Stock of an additional; 8 units. Calculate the cost associated with the safety stock and the total cost of the EOQ amount...

Which of the following is NOT an assumption of the traditional economic order quantity (EOQ) model?...

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the primary purpose of the Economic Order Quantity (EOQ) model is to: A. Maximize the customer...

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81. One of the assumptions for Economic Order Quantity (EOQ) is that items are single, with...

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The simple economic order quantity (EOQ) model shows how much to order (i.e., lot size) in...

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Find the EOQ, the total annual cost associated with the economic order quantity, the reorder point,...

Find the EOQ, the total annual cost associated with the economic order quantity, the reorder point, number of orders per year and the time between orders. Annual Demand 15,600 units Weeks Operating 52 weeks/year Set up Cost $60/order Holding rate 20% Unit cost $80 /unit Lead-Time 5 weeks

The Economic Order Quantity (EOQ) model is a classical model used for controlling inventory and satisfying...

The Economic Order Quantity (EOQ) model is a classical model used for controlling inventory and satisfying demand. Costs included in the model are holding cost per unit, ordering cost and the cost of goods ordered. The assumptions for that model are that only a single item is considered, that the entire quantity ordered arrives at one time, that the demand for the item is constant over time, and that no shortages are allowed. Suppose we relax the first assumption and...

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