Question of Chapter 8 (ORDER QUANTITIES)

1. What is definition of EOQ (Economy Order Quantity)?

2. Solve the following problem:

The annual demand for an SKU is 20,000 and it is ordered in quantities of 700 units. Calculate the average inventory and the number of order placed per year.

3. In batch manufacturing what is the basic purposes of inventories?

A .Store and keep goods                                               

B. Decouple supply and demand

C. Deliver product to the point of consumption

D. Protect the product

4. Please answer of this problem:

The annual demand is 12,000 units, the ordering cost is $45 per order, The carrying cost is 30%, and the unit cost is $25. The order quantity is 700 units.

Calculate:

a) Annual ordering cost

b) Annual carrying cost

c) Total annual cost

5. Solve the following problem:

The EOQ for an item is 3500 units, and the annual usage is 60,000 units. What is the period order quantity?