Question:

Can any one pls solve the math related to supply chain management?

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Given the following information, compute the economic order quantity, annual holding cost, annual ordering cost and annual total cost.

1. Annual requirements(R) = 50000 units

2. Set up cost(S) = $ 150 per order

3. Holding rate(k) = 15 percent

4. Unit cost(C) = $100 per unit

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1 ANSWERS


  1. Here it is mate ... the answer is economic order qtty= 1000

    Here is the detail (copy paste it in excel, A1 is 50000, A5 is the economic lot size, the rest is logical)

    50000 1. Annual requirements®

    150 2. Set up cost(S)

    0,15 3. Holding rate(k)

    100 4. Unit cost(C)

    1000 order qtty(units)

    =A5/2 avg stock in the year(units)

    =A6*A3*A4 holding cost per year($)

    =A1/A5 number of orders per year

    =A8*A2 ordering cost per year($)

    =A9+A7 TOTAL COST($)

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