Total Inventory Costs / Optimal Order Size

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• Support EOQ: Hospital Glove Simulation (UOP)

  Lot size vs. the EOQ and the inventory costs Economic order quantity is the lot size that minimizes total annual inventory holding and ordering costs.

• EOQ, Annual Order, Time between orders & Total Annual Inventory Cost

  Determine the optimal order size, minimum total annual inventory cost, number of annual orders, and time between orders. 1.Opitmal Order Size/ Economic Order Quantity = (2*F*D/C)^(1/2) F = Fixed Cost per order D = Demand for the year C = holding

• Calculate the EOQ/ELS for the following two cases. How large should the standard order size be for this product?

  Order size =1000 units So there are 15000/1000=15 order per year Ordering cost = 15*82 = $1230 Inventory holding cost = 0.5*1000*16 = $8000 Total cost of inventory = 1230+8000=$9230 Savings from optimal policy = 9230-6272.50 = 2957.50 Finished

• Kroft Foods: Operation Management

  Best Regards, 106714 The document provides the calculations for optimal order size and the minimum total annual inventory cost.

• Optimal Ordering Policy

  Determine the following: a) Optimal order quantity per order b) Total annual inventory costs associated with the optimal order size policy c) Optimal number of orders to place per year d) Number of operating days between orders, based on the

• Import Beer product line: Method for optimal ordering quantities

  Economic order quantity is a trade off between order size, order cost, and carrying cost thus the company can utilize the model to ensure the quantity ordered minimize cost.

• Calculating various inventory paremeters

  order size, minimum inventory cost, order cycle time, reorder point and safety stock.

• Q,R, system

  Total inventory cost will increase since inventory cots is the sum of carrying and ordering costs. 2. EOQ or optimal order quantity Q will increase.

• Inventory management

  Storage costs, which include insurance and cost of capital, amount to $5 per unit of average inventory. Every time an order is placed for more item X, it costs $10. a. Whenever item X is ordered, what should be the order size? b.