Problem #1 A & B b.- If the probability for unfavorable and favorable market conditions is 35% and 65% respectively, calculatethe expected EOQ considering these probabilities. Problem #1 - Jasper Inc., a company that sells air conditioning units for cars intends to reduce its total annual inventorycost. The annual demand is between 6,500 units if market condition is unfavorable and 8,000 units if market conditionsare favorable. The Purchasing & Warehousing Manager estimates that the ordering cost is $20.50 per order and theholding cost is $1.50 per unit per year.a.Calculate the Economic Order Quantity (EOQ), Annual Ordering Cost, Annual Holding Cost and TotalAnnual Inventory Cost under unfavorable and favorable market conditions.

The following information is given: Annual Demand (D) for favorable and unfavorable conditions is…

Answered: b. - If the probability for unfavorable…

b. - If the probability for unfavorable and favorable market conditions is 35% and 65% respectively, calculate the expected EOQ considering these probabilities.

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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