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\begin{tabular}{l} the trektonics store begins each month with 1150 phasers in stock. \\ \hline this stock is depleted each month and reordered. The carrying cost per phasers is \( \$ 36 \) per year \\ \hline and the fixed order cost is \( \$ 560 \). \\ \hline\end{tabular} \begin{tabular}{|l|l|l|l|}\hline Calculate the economic order quantity & & & \\ \hline\end{tabular}

Ask by Long Collins. in the United States
Feb 24,2025

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Answer

The economic order quantity is approximately 655 phasers.

Solution

To solve for the economic order quantity (EOQ), we first note that the EOQ formula is given by   EOQ = √((2 × D × S) / H) where   D = Annual demand,   S = Fixed order cost, and   H = Annual carrying (holding) cost per unit. From the problem we have:   • The store begins each month with 1,150 phasers in stock and sells (depletes) this amount during the month.   • Therefore, the monthly demand is 1,150 phasers.   • The annual demand D is 1,150 phasers/month × 12 months = 13,800 phasers/year.   • The fixed order cost S is given as $560.   • The carrying cost per phaser H is $36 per year. Step 1. Substitute the values into the EOQ formula:   EOQ = √((2 × 13,800 × 560) / 36) Step 2. Calculate the numerator first:   2 × 13,800 = 27,600   27,600 × 560 = 15,456,000 Step 3. Now divide by the carrying cost:   15,456,000 / 36 = 429,333.33 (approximately) Step 4. Finally, take the square root:   EOQ = √429,333.33 ≈ 655 phasers Thus, the economic order quantity is approximately 655 phasers.

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To calculate the economic order quantity (EOQ), we can use the EOQ formula: \[ EOQ = \sqrt{\frac{2DS}{H}} \] Where: - \(D\) = Demand rate (units per year) - \(S\) = Ordering cost per order - \(H\) = Holding cost per unit per year Given the information: - We know that the store begins each month with 1150 phasers in stock, so assuming that the monthly demand is equal to the stock, we have: \[ D = 1150 \text{ phasers/month} \times 12 \text{ months/year} = 13800 \text{ phasers/year} \] - The fixed order cost \(S = 560\). - The carrying cost \(H = 36\). Now, substituting the values into the EOQ formula: \[ EOQ = \sqrt{\frac{2 \times 13800 \times 560}{36}} \] Calculating the numerator: \[ 2 \times 13800 \times 560 = 15408000 \] Now, dividing by the holding cost: \[ \frac{15408000}{36} = 427200 \] Now, taking the square root: \[ EOQ = \sqrt{427200} \approx 655.34 \] Thus, rounding to the nearest whole number, the economic order quantity is approximately **655 phasers**.

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