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EOQ: Lilly’s Manufacturing needs fastener supplies to manufacture its products. The CFO estimates that the company will need about 200,000 cases next year. The cost of storing cases is about $0.90. The ordering cost is $500 for a shipment. A. Determine the EOQ. B. How many times will you order? C. What would be the total costs for ordering the cases 1, 6, and 12 times per year? D. What questionable assumptions are being made by the EOQ model?
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EOQ: Lilly’s Manufacturing needs fastener supplies to manufacture its products. The CFO estimates that the company will need about 200,000 cases next year. The cost of storing cases is about $0.90. The ordering cost is $500 for a shipment.
A. Determine the EOQ.
B. How many times will you order?
C. What would be the total costs for ordering the cases 1, 6, and 12 times per year?
D. What questionable assumptions are being made by the EOQ model?
