Answer to Question #70997 in Management for abdul

Question

2. (i) A company uses 5,120 bolts during the course of the year, and the usage is relatively
Constant throughout the year. These bolts are purchased for ₤2 each, and the lead time is 3 days. The holding cost per bolt per year is 10% of unit cost and the ordering cost per order is ₤12.5. There are 256 working days per year for this business.
a) What is EOQ?

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b) Given the EOQ, what is the average inventory?





c) In minimizing cost, how many orders would be made each year? What would be the annual ordering cost?(do not round off your answer)









d) Given the EOQ, what is the total annual inventory cost ( including purchase cost)







e) What is the time between orders?





f) What is the ROP(re-order point)?

Answer 1

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