Please Show EVERY Working VERY Clearly! Calculate the Economic Order Quantity, Total Annual Cost, Reorder Point, and ADDITIONAL Annual Cost (using a GRAPH) if the Procurement Manager increase the order quantity by 25% from the above EOQ. A Departmental Store needs to determine the order quantities and reorderpoints for the various products it carries. The following data refer to a specific itemin its product line.Cost to place an order - GBP 300 eachHolding Cost – 10% of product cost per yearCost per unit – GBP 7.5 eachAnnual Demand – 200,000 UnitsAverage Daily Demand – 200,000/365Lead Time – 5 days

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Calculate the Economic Order Quantity, Total Annual Cost, Reorder Point, and ADDITIONAL Annual Cost (using a GRAPH) if the Procurement Manager increase the order quantity by 25% from the above EOQ.

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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Question

Please Show EVERY Working VERY Clearly!

Calculate the Economic Order Quantity, Total Annual Cost, Reorder Point, and ADDITIONAL Annual Cost (using a GRAPH) if the Procurement Manager increase the order quantity by 25% from the above EOQ.

A Departmental Store needs to determine the order quantities and reorder
points for the various products it carries. The following data refer to a specific item
in its product line.
Cost to place an order - GBP 300 each
Holding Cost – 10% of product cost per year
Cost per unit – GBP 7.5 each
Annual Demand – 200,000 Units
Average Daily Demand – 200,000/365
Lead Time – 5 days

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Step 1: Introduce the given data:

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Step 2: Determine Economic order quantity:

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Step 3: Determine the annual cost:

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Step 4: Determine the reorder point:

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Step 5: Determine the additional cost:

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