Gosford Fruit & Vegetables Orders Most of Its Items in Lot

question 33

Essay

Gosford Fruit & Vegetables orders most of its items in lot sizes of 15 units.Average annual demand per kilo of kumara is 900 units per year.Ordering costs are $34.15 per order with an average purchasing price of $150.Annual inventory carrying costs are estimated to be 40% of the unit cost.
Required:
a.Determine the economic order quantity (EOQ).
b.Determine the annual cost savings if the shop changes from an order size of 15 units to the economic order quantity (EOQ).
c.Since the shelf life is limited,the Gosford Fruit & Vegetables must keep the inventory moving.Assuming a 360-day year,determine the optimal lot size under each of the following: (1)a 20-day shelf life and (2)a 10-day shelf life.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

---

Definitions:

Symbolic Gesture

A movement or action that expresses an idea, emotion, or sentiment, often without using words.

Top Executives

Individuals who hold the highest-level management positions within an organization, responsible for strategic planning and decision-making.

Training Programs

Structured educational courses designed to enhance the knowledge, skills, and competencies of employees or individuals in specific areas or professions.

Performance Contracts

Agreements that outline the expected outcomes or results from individuals or entities, often tied to rewards or penalties based on achievement.