Description

SUPPLY CHAIN MANAGEMENTA MEDICAL DEVICE COMPANY SELLS BRANDED POWER TOOLS TO THE HOSPITAL. THE ANNUAL DEMAND IS APPROXIMATELY 1800 BATTERIES. THE COST PRICE PER POWER TOOL IS $250 FOR AND ESTIMATED ANNUAL HOLDING COST IS 35% OF THE PRODUCT’S VALUE. IT COSTS APPROXIMATELY $180 TO PLACE AN ORDER ( ORDERING COST) THE COMPNY CURRENTLY ORDERS 150 POWER TOOLS PER MONTH ( COBSIDERING L T AS 30 DAYS )

A.    DETERMINE THE ORDERING , HOLDING, AND TOTAL INVENTORY COSTS FOR THE CURRENT ORDER QUANTITY.

B.    DETERMINE THE ECONOMINC ORDER QUANTITY ( EOQ)

C.    HOW MANY ORDERS SHOULD BE PLACED PER YEAR USING THE EOQ ?

D.    DETERMINE THE ORDERING, HOLDING AND TOTAL INVENTORY COSTS FOR THE EOQ