exel 3-1

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Week3-1exel.xlsx
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EOQ example

Economic Order Quantity
Demand = 10,000 Annual Requirements or Demand
Cost per item = $ 150.00 Purchase cost per Unit
A = Annual Usage, in dollars
B = $ 125.00 Administrative costs per order of placing the order
C = 28% Carrying costs of the inventory (expressed as an annual percentage of the inventory dollar value)
EOQ value = (exact value)
EOQ units = (rounded number)
Using this inventory management system, every time that you need to order this item, you buy EOQ of them!
EXTRA: What if your supplier requires you to purchase only in Cases of 60 units each? How much extra would this cost in a year?
Hint -- use the the table on the "Chart data" tab for the computation of "Total Annual Cost" for your EOQ and the best Case Lot.
When to order is another question…. See the next assignment to compute the Reorder Point.

Inventory Costs

Holding Cost 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Ordering Costs 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Cost 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Quantity per Order

Annual Cost

Chart data

Demand = 10,000 Annual Requirements or Demand
A = 0 Annual Usage, in dollars
$ 150.00 Purchase cost per Unit
B = $ 125.00 Administrative costs per order of placing the order
C = 28% Carrying costs of the inventory (expressed as an annual percentage of the inventory dollar value)
EOQ = 0
Min Q 0
Max Q 0
Q Annual Order Cost Annual Holding Cost Total Cost
0 ERROR:#DIV/0! $ - 0 ERROR:#DIV/0!
0 ERROR:#DIV/0! $ - 0 ERROR:#DIV/0!
0 ERROR:#DIV/0! $ - 0 ERROR:#DIV/0!
0 ERROR:#DIV/0! $ - 0 ERROR:#DIV/0!
0 ERROR:#DIV/0! $ - 0 ERROR:#DIV/0!
0 ERROR:#DIV/0! $ - 0 ERROR:#DIV/0!
0 ERROR:#DIV/0! $ - 0 ERROR:#DIV/0!
0 ERROR:#DIV/0! $ - 0 ERROR:#DIV/0!
0 ERROR:#DIV/0! $ - 0 ERROR:#DIV/0!
0 ERROR:#DIV/0! $ - 0 ERROR:#DIV/0!
0 ERROR:#DIV/0! $ - 0 ERROR:#DIV/0!
0 ERROR:#DIV/0! $ - 0 ERROR:#DIV/0!
0 ERROR:#DIV/0! $ - 0 ERROR:#DIV/0!
0 ERROR:#DIV/0! $ - 0 ERROR:#DIV/0!
0 ERROR:#DIV/0! $ - 0 ERROR:#DIV/0!
0 ERROR:#DIV/0! $ - 0 ERROR:#DIV/0!
0 ERROR:#DIV/0! $ - 0 ERROR:#DIV/0!
0 ERROR:#DIV/0! $ - 0 ERROR:#DIV/0!
0 ERROR:#DIV/0! $ - 0 ERROR:#DIV/0!
0 ERROR:#DIV/0! $ - 0 ERROR:#DIV/0!