You manage a candy store in a high traffic shopping mall where you have collected the following information.Answer the next four questions based on these data.
Weekly demand for small candy boxes = 90 boxes
Cost to place one purchase order with the box supplier = $19.80
Cost to hold one box for one year in inventory = $2.45
Lead time = 2 weeks
Weeks in a year = 52 weeks
a.What is the Economic Order Quantity (EOQ)?
b.Assuming the EOQ is ordered, what is the average inventory level (i.e., cycle inventory)?
c.Assuming the EOQ is ordered, what is the total annual order and inventory holding cost?
d.If a Fixed Period System (FPS) is adopted, what is the replenishment level (M) without safety stock?

Question

You manage a candy store in a high traffic shopping mall where you have collected the following information.Answer the next four questions based on these data.
Weekly demand for small candy boxes = 90 boxes
Cost to place one purchase order with the box supplier = $19.80
Cost to hold one box for one year in inventory = $2.45
Lead time = 2 weeks
Weeks in a year = 52 weeks 
a.What is the Economic Order Quantity (EOQ)?
b.Assuming the EOQ is ordered, what is the average inventory level (i.e., cycle inventory)?
c.Assuming the EOQ is ordered, what is the total annual order and inventory holding cost?
d.If a Fixed Period System (FPS) is adopted, what is the replenishment level (M) without safety stock?

Quizplus · Accepted Answer

The Answer of You manage a candy store in a high traffic shopping mall where you have collected the following information.Answer the next four questions based on these data.
Weekly demand for small candy boxes = 90 boxes
Cost to place one purchase order with the box supplier = $19.80
Cost to hold one box for one year in inventory = $2.45
Lead time = 2 weeks
Weeks in a year = 52 weeks 
a.What is the Economic Order Quantity (EOQ)?
b.Assuming the EOQ is ordered, what is the average inventory level (i.e., cycle inventory)?
c.Assuming the EOQ is ordered, what is the total annual order and inventory holding cost?
d.If a Fixed Period System (FPS) is adopted, what is the replenishment level (M) without safety stock?

You Manage a Candy Store in a High Traffic Shopping