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Rockhampton Company Was in the Process of Completing the Quarterly

Question 74

Essay

Rockhampton Company was in the process of completing the quarterly planning for the purchasing department when a major computer malfunction lost most of his data.For direct material QBJ,he was able to recover the following:
 Average inventory level of QBJ 400 Orders per year 30 Average daily demand 26 Working days per year 250 Annual ordering costs $4000 Annual carrying costs $6000\begin{array} { | l | l | } \hline \text { Average inventory level of QBJ } & 400 \\\hline \text { Orders per year } & 30 \\\hline \text { Average daily demand } & 26 \\\hline \text { Working days per year } & 250 \\\hline \text { Annual ordering costs } & \$ 4000 \\\hline \text { Annual carrying costs } & \$ 6000 \\\hline\end{array}
Ralph purchases at the EOQ quantity level.
Required:
Determine the annual demand,the cost of placing an order,the annual carrying cost of one unit,and the economic order quantity (EOQ).
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Correct Answer:

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Annual demand = 96 × 250 = 24 ...

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