Using the Data Below, Find the EOQ, the Total Annual

question 22

Essay

Using the data below, find the EOQ, the total annual cost associated with the economic order quantity, and the reorder point.
$$\begin{array} { l l } \text { Annual Demand: } & \text { 8,000 units } \\\text { Weeks Operating: } & 52 / \text { year } \\\text { Ordering Cost: } & \$ 35 / \text { arder } \\\text { Holding Cost: } & \$ 4 / \text { unityear } \\\text { Lead-Time: } & 3 \text { weeks }\end{array}$$

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Definitions:

Appliance Manufacturer

A company that produces electrical machines and devices for domestic use.

Variable Resources

Inputs or factors of production that can be adjusted in the short term to meet changes in the level of output, such as labor and raw materials.

MRPs

Marginal revenue products, a measure of the additional revenue generated by employing an additional unit of a resource or factor of production.

Labor Cost

The total expenditure incurred by employers for the wages, benefits, and taxes associated with their workforce.