One Cycle Limited (OCL) is a manufacturer of sports bicycles. The company uses Pirelli-P44X tyres in its sports bicycles. The following information is provided in relation to Pirelli-P44X tyres for the year 2021. The annual demand for Pirelli-P44X tyres is 400,000 tyres. The ordering cost per order is Kshs 10,500. The Holding cost per unit of Pirelli-P44X tyre is Shs 158. Required; Calculate the Economic order Quantity (EOQ) for the Pirelli-P44X tyres using the information provided above Calculate the total ordering cost and the total holding cost if the reorder quantity is as per the EOQ computed in (i) above. Explain the trade-off that occurs between the ordering cost and the holding cost as the order quantity increases Explain two assumptions of the Economic order Quantity (EOQ)
Unitary Method
The word “unitary” comes from the word “unit”, which means a single and complete entity. In this method, we find the value of a unit product from the given number of products, and then we solve for the other number of products.
Speed, Time, and Distance
Imagine you and 3 of your friends are planning to go to the playground at 6 in the evening. Your house is one mile away from the playground and one of your friends named Jim must start at 5 pm to reach the playground by walk. The other two friends are 3 miles away.
Profit and Loss
The amount earned or lost on the sale of one or more items is referred to as the profit or loss on that item.
Units and Measurements
Measurements and comparisons are the foundation of science and engineering. We, therefore, need rules that tell us how things are measured and compared. For these measurements and comparisons, we perform certain experiments, and we will need the experiments to set up the devices.
One Cycle Limited (OCL) is a manufacturer of sports bicycles. The company uses Pirelli-P44X tyres in its sports bicycles. The following information is provided in relation to Pirelli-P44X tyres for the year 2021.
- The annual demand for Pirelli-P44X tyres is 400,000 tyres.
- The ordering cost per order is Kshs 10,500.
- The Holding cost per unit of Pirelli-P44X tyre is Shs 158.
Required;
- Calculate the Economic order Quantity (EOQ) for the Pirelli-P44X tyres using the information provided above
- Calculate the total ordering cost and the total holding cost if the reorder quantity is as per the EOQ computed in (i) above.
- Explain the trade-off that occurs between the ordering cost and the holding cost as the order quantity increases
- Explain two assumptions of the Economic order Quantity (EOQ)
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