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Homework answers / question archive / Yorkville University - BUSI 2113 Unit 9 problems BUSI 2113 production and operation management Instructor: Fatima Catalan Problem1)stocks workbooks have following characteristics: Demand D = 19,500 units/year Ordering cost S = $25/order Holding cost H = $4/unit/year Calculate the EOQ for the workbooks

Yorkville University - BUSI 2113

Unit 9 problems

BUSI 2113 production and operation management Instructor: Fatima Catalan

Problem1)stocks workbooks have following characteristics: Demand D = 19,500 units/year

Ordering cost S = $25/order Holding cost H = $4/unit/year

- Calculate the EOQ for the workbooks.
- What are the annual holding costs for the workbooks?

- What are the annual ordering costs?

Problem2

- Find the economic order quantity.

- Find the annual holding costs.

- Find the annual ordering costs.

- What is the reorder point?

1-99 units’ price per unit =$350 100-199 units’ price per unit =$325

200 or more units price per unit =$300.

A. Optimal order quantity EOQ = SQRT (2 x D x S / H) = SQRT (2 x 4800 x 120 / 35)

B. H1 = 10 %∗350=35 $ (1-99 units)

H2 = 10 %∗325 = 32.5 $ (100-199 units)

H3 = 10 %∗300=30 $ (200+ units)

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