Business, 30.03.2020 15:55 laurentsupreme

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?

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Demand for a certain radial tires at a tire company is 800 units per month. Each tire costs the comp...

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