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Title: Manfred Manufacturing is involved in the production of machine parts. The company uses 600,000 ... Post by: borteleto on Jul 6, 2018 Manfred Manufacturing is involved in the production of machine parts. The company uses 600,000 pounds of steel annually. The current purchasing cost for steel is $3.20 per pound. The carrying cost for inventory is 10 percent of the purchase price. The cost of ordering steel is $800 per order. The company has decided to maintain a safety stock of 15,000 pounds. The delivery time per order is 6 days. The company works 365 days a year.
a.Determine the optimal EOQ. b.How many orders will be placed annually? c.What is the average inventory? d.What is the inventory order point? (That is, at what level of inventory should a new order be placed?) e.What is the company's total inventory cost for the year? Title: Manfred Manufacturing is involved in the production of machine parts. The company uses 600,000 ... Post by: Marc18 on Jul 6, 2018 a.Q* = = 54,772 lbs. b.Number of orders placed annually = = 10.95 c.Average inventory = + 15,000 = 42,386 lbs. d.15,000 lbs. + ((600,000/365 ) 6) lbs. = 24,863 lbs. e.Total inventory cost = (42,386)(.10)($3.20) + 10.95($800) = $22,324 |