Posted on by Judy

Demand for Deskpro PC at SuperPC is 1000 units per month, fixed shipping cost for each order placement is $4000. Each Deskpro costs SuperPC $500 to purchase from its supplier, and the holding cost is 20% of the unit cost. 1)How many computers should SuperPC order each time? 2)What is the cycle inventory? 3)What is the number of orders per year? 4)Annual ordering and holding cost? 5)Average flow time?

Demand
1000
per month
D
Annual Demand
12000
S
Order cost
4000
C
Cost per unit
500
H
Holding cost
100
=0.2*500
1
EOQ=sqrt(2*D*S/H)
$ 979.80
2
Cycle inventory=EOQ/2
$ 489.90
3
No. of orders=D/EOQ
13.00
=ROUNDUP(C3/C9,0)
4
Annual ordering cost= No of orders*S
$ 52,000.00
Holding Cost=Avg inventory*H
$ 48,989.79
 
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