A Local Artisan Uses Supplies Purchased from an Overseas Supplier

question 144

Essay

A local artisan uses supplies purchased from an overseas supplier.The owner believes the assumptions of the EOQ model are met reasonably well.Minimization of inventory costs is her objective.Relevant data,from the files of the craft firm,are annual demand (D)=150 units,ordering cost (S)= $42 per order,and holding cost (H)= $4 per unit per year
a.How many should she order at one time?
b.How many times per year will she replenish her inventory of this material?
c.What will be the total annual inventory (holding and setup)costs associated with this material (rounded to the nearest dollar)?
d.If she discovered that the carrying cost had been overstated,and was in reality only $1 per unit per year,what is the corrected value of EOQ?

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Definitions:

NYSE Hybrid Market

A market model by the New York Stock Exchange that incorporates both electronic trading and traditional floor trading to execute orders.

Dealer Market

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Auction Market

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