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inventory

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › inventory

  • This topic has 1 reply, 2 voices, and was last updated 10 years ago by John Moffat.
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  • December 3, 2014 at 3:43 pm #216891
    sonia
    Member
    • Topics: 13
    • Replies: 28
    • ☆

    demand 7500 per month
    each unit cost 5 per order cost is 100 holding cost .5
    lead time 30 days between placing and receivng order
    if they order EOQ hoe frequently will place order (near to days) how many units in each order ?

    December 3, 2014 at 4:13 pm #216917
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54711
    • ☆☆☆☆☆

    D = 12 x 7500 = 90,000; Co = 100; Ch = 0.5.
    So the EOQ = 6,000.

    So it means ordering 90,000/6,000 = 15 times a year.

    Which means ordering every 365/15 = 24.3 days.

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