The Sales Of A Popular Mouthwash At Merkle Pharmacies Over The Past 6 Months Have Averaged 1 800 Cases Per Month Resulti 1 (133.14 KiB) Viewed 75 times
The Sales Of A Popular Mouthwash At Merkle Pharmacies Over The Past 6 Months Have Averaged 1 800 Cases Per Month Resulti 2 (56.06 KiB) Viewed 75 times
The sales of a popular mouthwash at Merkle Pharmacies over the past 6 months have averaged 1,800 cases per month resulting in 21,600 cases per month, which is the current order quantity. Merkle's cost is $14.00 per case. The company estimates its cost of capital to be 10 percent. Insurance, taxes, breakage, handling, and pilferage are estimated to be approximately 5 percent of item cost. Thus, the annual inventory-holding costs are estimated to be 15 percent of item cost. The cost of placing an order is estimated to be $40.00 per order regardless of the quantity requested in the order. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. X Open spreadsheet Questions 1. What is the minimum-cost economic order quantity? Round your answer to the nearest whole number. 2. is the annual ordering cost based on the mir hum-cos economic order quantity? the rounded EOQ value in your calculations. Round your answer to the nearest cent. $ cases. 3. What is the annual inventory holding cost based on the minimum-cost economic order quantity? Use the rounded EOQ value in your calculations. Round your answer to the nearest cent. $ 4. What is the total annual cost based on the minimum-cost economic order quantity? Use the rounded EOQ value in your calculations. Round your answer to the nearest cent. $ 5. What are the total cost savings in absolute and relative terms caused by using the minimum-cost economic order quantity instead of the current purchasing policy of Q = 1,800? Use the rounded EOQ value in your calculations. Round your answer savings to the nearest whole number. abso cost savings to the nearest and answer for relative ost EOQ Benefit: $ EOQ Benefit (%): %
Quantity Model sis Annual Demand Rate Ordering Cost er Quantity (to the nearest whole) Order cost Inventory cost Total cost 19 Unit Cost Carrying Charge Rate Order Quantity Order cost Inventory cost Total cost EOQ Benefit EOQ Benefit (%) 21,600 $40.00 $14.00 0.15 1,542 1,633 1,723 1,800 Order Quantity Order cost Inventory cost Total cost 454 544 635 726 816 907 998 1,088 1,179 1,270 1,361 1,451 Formulas ▼ #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A F ✓ #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Use the area below to draw a line chart for cost functions. #N/A #N/A #N/A #N/A ▼ #N/A P #N/A ▼ #N/A F #N/A #N/A #N/A ▼ #N/A ▼ #N/A ▼ #N/A ▼ #N/A #N/A
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