Ask Question
17 March, 16:51

The weekly demand is 200 units. The cost to place an order is $2.00, and the time from ordering to receipt is four weeks. The weekly inventory carrying cost is $0.01 per unit. Suppose that the weekly production rate is 500 units. What is the optimal EPQ quantity

+2
Answers (1)
  1. 17 March, 17:17
    0
    Optimal EPQ quantity = 2633

    Explanation:

    Annual demand = D = 200 / week x 52 weeks = 10400 units

    Cost to place an order = Co = $2

    Weekly inventory carrying cost = I = $0.01

    Weekly demand = d = 200 units

    Weekly production rate = p = 500

    Optimal EPQ quantity = Square root (2 x D x C/I x (p/p-d))

    = Square root (2 x 10400 x 2/0.01x (500 / 500 - 200)

    = Square root (2 x 10400 x 200 x 500/300)

    = 2633.12 (2633 rounded to nearest whole number)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “The weekly demand is 200 units. The cost to place an order is $2.00, and the time from ordering to receipt is four weeks. The weekly ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers