Scenario 9.6
Consider the following data for an independent-demand item maintained by Angie Bonpensiero, the proprietor of a local auto repair shop:
Weekly demand = 50 units
Ordering cost = $8/order
Holding cost = $4/unit/year
Weeks in a year = 50
-Use the information in Scenario 9.6. If Bonpensiero uses the EOQ model, how frequently must she place orders for this item?
A) every week
B) every 2 weeks
C) every 3 weeks
D) every 4 weeks

Question

Quizplus · Accepted Answer

The EOQ formula is: EOQ = sqrt((2*D*O)/H), where D is weekly demand, O is ordering cost, and H is holding cost. Plugging in the given values, we get: EOQ = sqrt((2*50*8)/4) = 40 units. Since the weekly demand is 50 units, Bonpensiero must place orders every 40/50 = 0.8 weeks, or every 2 weeks.

Scenario 9.6 Consider the Following Data for an Independent-Demand Item Maintained by Maintained