COMMERCE 4QA3 Chapter Notes - Chapter 9: Economic Order Quantity, Litter Box, Carrying Cost
17 Apr 2015
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Winter 2015: sam"s cat hotel, economic order quantity d = 90/week. = 399. 93, or 400 bags: reorder point, r. R = demand during protection interval + safety stock. Demand during protection interval = d l = 90 * 3 = 270 bags. When the desired cycle-service level is 80%, dlt = Safety stock = 0. 84 * 26 = 21. 82, or 22 bags. 292: initial inventory position = oh + sr bo = 320 + 0 0. Because inventory position remains above 292, it is not yet time to place an order: annual holding cost. When the eoq is used these two costs are equal. , the annual holding cost is larger than the ordering cost, therefore q is too large. Total cost using eoq is ,263. 60, which is . 59 less than when the order quantity is. 500 bags: sam"s cat hotel, revisited, if the demand is only 60 bags per week, the correct eoq is:
