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Step2247
2 months ago
9

Demand for a certain radial tires at a tire company is 800 units per month. Each tire costs the company $80. Ordering costs are

$75, and the annual carrying cost for each tire is $16. That is,
D = 800 * 12 = 9600 /yr
S = $75 /order
P = $80
H = $16 /unit / yr

1. How many tires should the manager order in each lot?

2. What is the company's average inventory of this tire, if the EOQ quantity is ordered?

3. How many times per year will an order be placed, if EOQ quantity is ordered?

4. How often will an order be placed (length of order cycle), if EOQ quantity is ordered?

5. How much does the company spend annually on fixed ordering costs, if EOQ quantity is ordered?

6. How much does the company spend annually on holding (carrying) costs, if EOQ quantity is ordered?
Business
1 answer:
Scilla [3.8K]2 months ago
5 0
1. 300 tires 2. 150 units 3. 32 times 4. 11.4 days 5. $2,400 6. $2,400
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<passuming this="" income="" continues="" indefinitely="" the="" present="" value="" of="" is="" calculated="" as="">

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2 months ago
A company would like to produce 1000 products per week for 30 weeks. The Direct Material Cost for the raw materials used in the
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