Economic Order Quantity (EOQ) Model With Finite Production R

A chemical manufacturer produces a compound at the rate of 10,000 pounds a day over 250 days each year. Annual demand for that compound is 600,000 pounds per year, and each pound sells for $3.90. There is a fixed setup cost of $1,500 for each production run, and a variable cost of $3.50 for each pound produced. The following costs are incurred:

? Interest rate on the cost of capital is 22% per annum (annually).
? Storage and handling costs amount to 12% of the compounds cost per annum.

Answer the following questions:
1) What is the optimal production lot for the compound (write down the model name, its parameters and formula)?
2) Compute the uptime, downtime and cycle time in days, and find the cycle fraction of uptime and the cycle fraction of downtime (include the formula).
3) What are average annual holding and setup costs for the compound (include the formula)?
4) What is the annual profit for this compound?

The EconomicOrderQuantity(EOQ)model is helpful in determining accurate inventory decisions. Discuss the major inventory costs that are used in determining the EOQ. Propose an example from your own experience or what you could imagine where EOQ could be used to improve inventory decisions.

A large bakery buys flour in 25-pound bags. The bakery uses an average of 4,860 bags a year. Preparing an order and receiving a shipment of flour involves a cost of $10 per order. Annual carrying costs are $75 per bag.
a) Determine the economicorderquantity.
b) What is the average number of bags on han

What is EOQ is, where did it come from, and what all the numbers mean.
How to determine what goes into Order Cost.
How to determine what goes into Carrying Cost.
What can go wrong in calculating EOQ.

Annual demand: 2500
Holding cost per bracket per year: $1.50
Order cost per order: $18.75
Lead time: 2 days
Working days per year: 250
Please answer the following questions:
A. What is the EconomicOrderQuantity(EOQ)?
B. Given the EOQ: What is the annual inventory holding cost?
C. Given the EOQ: What would be the

Details: 1. Which of the following statements are true for f(x) = -3x2 + 2x + 5?
(Chapter 10)
a. f(x) is a concave function
b. f(x) /= 2 is a convex set
d. a and b
2. In the basic EOQ model, if D = 55 per month, S = $10, and H = $7
per unit per month, what is the EOQ? (Chapter 16

Suppose that you are the manager of a production department that uses 400 boxes of rivets per year. The supplier quotes you a price of $8.50 per box for an order size of 199 boxes or less, a price of $8.00 per box for orders of 200 to 999 boxes, and a price of $7.50 per box for an order of 1,000 or more boxes. You assign a holdi

What is the EconomicOrderQuantity technique and what are the basic assumptions the model formula follows? What are some different companies that could benefit from using this type of inventory management and why?

The EOQ model has a number of assumptions. List them and explain whether they are readily attainable. For example, will the adjustment for quantity discounts easily work?

15. (Comprehensive EOQ calculations) Knutson Products Inc. is involved in the production of airplane parts and has the following inventory, carrying, and storage costs:
1. Orders must be placed in round lots of 100 units.
2. Annual unit usage is 250,000. (Assume a 50-week year in your calculations.)
3. The carrying cost is