Using the POQ method of ordering, calculate the total cost of carrying and ordering inventory for the 6 week period shown. Use a POQ = 3 weeks for your answer.
$$\begin{array} { l c c c c c c }
\text { Week } & 1 & 2 & 3 & 4 & 5 & 6 \
\text { Net requirements } & 60 & 40 & 10 & 50 & 20 & 30 \
\text { Planned order receipts } & & & & & & \
\text { Ending inventory } & & & & & &
\end{array}$$
Cost to place an order = $100.00
Cost to carry inventory = $1.00 per unit per week
Annual demand = 1,500 units
Cost per unit = $200.00
Opening inventory = 0 units
A) $140
B) $280
C) $340
D) $400
E) none of the above

Question

Using the POQ method of ordering, calculate the total cost of carrying and ordering inventory for the 6 week period shown. Use a POQ = 3 weeks for your answer.
$$\begin{array} { l c c c c c c } 
\text { Week } & 1 & 2 & 3 & 4 & 5 & 6 \
\text { Net requirements } & 60 & 40 & 10 & 50 & 20 & 30 \
\text { Planned order receipts } & & & & & & \
\text { Ending inventory } & & & & & &
\end{array}$$
Cost to place an order = $100.00
Cost to carry inventory = $1.00 per unit per week
Annual demand = 1,500 units
Cost per unit = $200.00
Opening inventory = 0 units
A) $140
B) $280
C) $340
D) $400
E) none of the above

Quizplus · Accepted Answer

The Answer is C

Using the POQ Method of Ordering, Calculate the Total Cost