MGT 3410 Mangement

  • Ross White’s machine shop uses 2500 brackets during the course of a year, and this usage is relatively constant throughout the year. These brackets are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost per bracket per year is $1.50 (or 10% of the unit cost) and the ordering cost per order is $18.75. There are 300 working days per year.
  • Develop a total cost model for this system.
  • What is the EOQ for this problem?
  • What is the cycle time?
  • What is the reorder policy?
  • What are the total annual holding and ordering costs associated with your recommended EOQ?
  • What is the total annual cost associated with your recommended EOQ?
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