XYZ Pharmaceuticals sells COVID testing kits. Calculate the Economic Order Quantity, or EOQ, if annual demand is 20,000 testing kits, inventory storage costs average 20 percent, the unit price per kit is $50, and ordering costs are $25.

XYZ Pharmaceuticals sells COVID testing kits. Calculate the Economic Order Quantity, or EOQ, if annual demand is 20,000 testing kits, inventory storage costs average 20 percent, the unit price per kit is $50, and ordering costs are $25.

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

See similar textbooks

Related questions

Q: hakdog Manufacturing assembles security systems. It purchases 3,600 high-definition security cameras…

A: Under Economic Order Quantity A= Annual usage in units (Demand)S= ordering cost (per order) in…

Q: Describe the 3 differences between a fixed-quantity (Q) and a fixed-period (P) inventory system? a

A: An inventory system is a process by which you follow your goods throughout your complete supply…

Q: Discuss the relationship between Economic Order Quantity and Just-In-Time inventory system. Which…

A: 1. Economic Order Quantity (EOQ):The optimal order quantity (EOQ), which is a traditional inventory…

Q: Given Information Service Level - 95% (z value= 1.6649) Order Cost - $125 Order Cycle (weeks) -…

A: Given data is Annual demand = 27040 Holding cost(H) = 1659317.307 Order cycle = 4, 5, 6, 7, and 8…

Q: William Beville's computer training school, in Richmond, stocks workbooks with the following…

A: The optimal quantity a business should acquire to reduce its inventory expenses, such as shortfall…

Q: a) The EOQ for the workbooks is (round your response to the nearest whole number).

A: Economic order quantity refers to the volume of production that the business should add in order to…

Q: What are the primary trade-offs captured in the Economic Order Quantity (EOQ) Model? Inventory Cost…

A: ECONOMIC ORDER QUANTITY (EOQ) MODEL It is the order quantity that limits total holding and ordering…

Q: Who wants to participate in inventory decisions of cost of ownership? Levels of inventory…

A: Inventory choices including the cost of ownership that is an individual answerable for inventory…

Q: Average demand = μ = 350 Standard deviation of demand during lead time = OLT = 10 kits 5% stockout…

A: Reorder point is the minimum level of inventory established by an organization that is also a signal…

Q: L. Houts Plastics is a large manufacturer of injection-molded plastics in North Carolina. An…

A: ABC classification, also known as ABC analysis or ABC categorization, is a technique used in…

Q: Matthew Liotine's Dream Store sells water beds and assorted supplies. His best-selling bed has an…

A: Given-

Q: What is the annual cost of holding the cycle inventory? (Please wait and round at the end of the…

A: The annual cost of holding the cycle inventory can be calculated using the Economic Order Quantity…

Q: QI AFG Company supplies an electronic amplifier to a company that incorporates these anmplifiers to…

A: Given- Annual Demand (D) = 4000 Units Unit Cost (P) = $10 Holding Cost (H) = 5% of Unit Cost =…

Q: Data: D = 7000 flyers, Q = 500 flyers S = $100, k = 28%, C = $2, number of days/year = 350 days…

A: Given the data stated below, the Annual demand is 7000 flyers, and the current order quantity is 500…

Q: A certain type of chair costs $10, and the annual carrying cost rate is 0.20. Annual demand is 12,…

A: Given data is Annual demand (D) = 12 Order cost (S) = $3 Carrying cost (H) = 0.20%(10)=$2

Q: Explain the link between the yearly ordering cost and the amount of the order. Why is it…

A: Inventory refers to the items, goods, materials, and merchandise that a business may hold with the…

Q: snip

A: Fixed Order Quantity refers to ordering a fixed volume or quantity of order size, whenever inventory…

Q: Thomas Kratzer is tbe purchasing manager for theheadquarters of a la rge insurance company chain…

A: Note: Since you have posted an inquiry with different sub-parts, we will settle the initial three…

Q: Please do not give solution in image format thanku Daily demand for Chandler's Footballs varies…

A: Mean (x) = 195Standard deviation (Sd) = 12Lead time(L) = 3

Q: How does the purchase connection to the classic EOQ model work?

A: EOQ Model: EOQ stands for Economic Order Quantity and this model will help to find…

Q: Economic Order Quantity A pipe manufacturer requires a chemical for making plastic at the rate of…

A: Economic Order Quantity is a inventory management technique which helps to identify the optimal…

Q: Use ABC analysis to determine the items deserving mostattention and tightest inventory control

A: ABC analysis is a tool for classifying products based on their stock requirements. It's difficult to…

Q: Yuliia is Guest Experience Director at the Lego store. Daily demand averages 450 kits, with a…

A: From the given data, I would only determine the safety stock,

Q: A store sells university coffee mugs. Daily demand is 25 mugs with a standard deviation of 4 mugs…

A: Daily demand = 25 mugsOperating days = 250 mugs per dayAnnual demand (D) = 25×250 = 6250…

Q: The Eagle Mountain Hospital uses disposable surgical packages (Surg Pac) for many of the routine…

A: Instead of employing/using a reorder quantity calculation, multiple firms place orders for items…

Q: Explain the key assumptions of the basic EOQ model.

A: The purchase amount (EOQ) methodology is the approach that generates an order quantity for the firm.…

Q: What are the basic EOQ model's assumptions, and to what extent do they limit the model's utility?

A: -Demand is specified and distributed uniformly throughout the year.-There is no delay between making…

Question

100%

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Similar questions

Based on available information, lead time demandfor PC jump drives averages 50 units (normally distributed),with a standard deviation of 5 drives. Management wants a97% service level.a) What value of Z should be applied?b) How many drives should be carried as safety stock?c) What is the appropriate reorder point?
Matthew Liotine's Dream Store sells water beds and assorted supplies. His best-selling bed has an annual demand of 405 units. Ordering cost is $38; holding cost is $5 per unit per year. a) To minimize the total cost, how many units should be ordered each time an order is placed? EOQ = units (round your response to the nearest whole number). b) If the holding cost per unit was $6.00 instead of $5, what would the optimal order quantity be? New EOQ = units (round your response to the nearest whole number). A
Discuss why is it not necessary to include product cost in the EQQ model, but the quantity inventory system, discount model requires this information ?
What is the EOQ and what is the lowest total cost?
Annual demand (D) is 49,000 units. Ordering Cost (S) is $1,000 per order. Holding cost (H) is $2 per unit per year. Find economic order quantity (Q*). 7,000 units 49,000,000 units 4,950 units 3,500 units 4,083 units
If annual demand is 12,000 units, annual holding cost is $15 per unit, and setup cost per order is $25, what is the EOQ lot size?
1. What are some of the advantages of using sage 50 inventory system 2. Identify the steps to set up inventory item in sage 50 3. Explain the implication of sage 50 as an integrated system Plagiarism =o Write in good English language with examples
Regional Supermarket is open 360 days per year. Daily use of cash register tape averages 10 rolls. Usage appears normally distributed with a standard deviation of 2 rolls per day. The cost of order-ing tape is $1, and carrying costs are 40 cents per roll a year. Lead time is three days. a. What is the EOQ?b. What ROP will provide a lead time service level of 96 percent?
snip
Explore the concept of Vendor-Managed Inventory (VMI) and its synergy with the Wilson approach.