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  • Week 10 Assignment: Nikola Blaskovic BUSN 4110 Fall Semester

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    Haris Kolarević
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    This document contains multiple summaries of inventory management calculations: 1) For an order quantity of 80 units with a holding cost of $5 per unit per year, the total cost is minimized. 2) With a holding cost of $6 per unit per year, the optimal order quantity is 73.03 units. 3) For annual demand of 6000 units, the economic order quantity is 189.737 units with an optimal number of orders per year of 31.622 placed approximately every 8 days. 4) For a production run, the optimal quantity is 1217.161 units with a maximum inventory level of 1095.445 units and a total annual cost of $657.273. 5

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    This document contains multiple summaries of inventory management calculations: 1) For an order quantity of 80 units with a holding cost of $5 per unit per year, the total cost is minimized. 2) With a holding cost of $6 per unit per year, the optimal order quantity is 73.03 units. 3) For annual demand of 6000 units, the economic order quantity is 189.737 units with an optimal number of orders per year of 31.622 placed approximately every 8 days. 4) For a production run, the optimal quantity is 1217.161 units with a maximum inventory level of 1095.445 units and a total annual cost of $657.273. 5

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    7 views2 pages

    Week 10 Assignment: Nikola Blaskovic BUSN 4110 Fall Semester

    Uploaded by

    Haris Kolarević
    This document contains multiple summaries of inventory management calculations: 1) For an order quantity of 80 units with a holding cost of $5 per unit per year, the total cost is minimized. 2) With a holding cost of $6 per unit per year, the optimal order quantity is 73.03 units. 3) For annual demand of 6000 units, the economic order quantity is 189.737 units with an optimal number of orders per year of 31.622 placed approximately every 8 days. 4) For a production run, the optimal quantity is 1217.161 units with a maximum inventory level of 1095.445 units and a total annual cost of $657.273. 5

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    of 2

    Nikola Blaskovic

    BUSN 4110
    Fall Semester

    Week 10 Assignment
    12.10

    D=400 units S=$40 H=$5 per unit per year


    2𝐷𝑆
    a) EOQ=√ = 80
    𝐻

    To minimize the total cost, 80 units should be ordered each time an order is placed.
    2*400*40
    b) H=$6 EOQ= √ =73.03
    6

    When holding cost is $6 the optimal order quantity would be 73.03 units.

    12.14

    D=6000 units/per year p=$100 of unit H=$10 per unit/per year S=$30 per order

    D (one week)=120 units


    2*6000*30
    a) EOQ=√ =189.737
    10

    b) Average inventory: 𝐸0Q = 94.869


    2
    D
    c) Optimal number of orders: 𝑁 = = 31.622
    Q

    d) Optimal number of days between two orders: T= 250 = 7.905 ∼8 𝑑𝑎𝑦𝑠


    31.622

    e) Annual cost of ordering inventory: ( 𝐷) * 𝑆 = $ 948.68


    Q

    Annual cost of holding inventory: (Q) * 𝐻 = $ 948. 68


    2

    f) TC= OC+HC+(6000*100)= 601897.36

    1
    Nikola Blaskovic
    BUSN 4110
    Fall Semester

    S=$40 H=$0.60 p=500 d=50 D=10000


    2𝐷𝑆 800000
    a) Qp=√ 𝑑 = √0.60∗0.9 = 1217.161 units
    𝐻(1−( ))
    𝑝

    b) Max inventory level: Q*(1- 𝑑) = 1217.161 * 0.9 =1095.445 units (Imax)


    𝑝

    c) Production runs: 𝐷 = 8.216


    Q

    1 𝑑
    d) TC: (𝐷) * 𝑆 + 𝐻 * Q * (1 − ( )) = 8.216 * 40 + 1 * 0.60 * 1217.161 * 0.9 = 657.273
    Q 2 𝑝 2

    12.42

    D=50 units ρ=5

    a) Z value for 97% should be applied which is 1.88

    b) Safety Stock: 1.88*5=9.4

    c) Reorder Point: 50 + 9.4 = 50.4

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