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\begin{tabular}{l} the trektonics store begins each month with 1150 phasers in stock. \\ this stockis depleted each month and reordered. The carrying cost per phasers is \( \$ 36 \) per year \\ and the fixed order cost is \( \$ 560 \). \\ \hline\end{tabular} \begin{tabular}{l} calculate the optimal number of orders per year \\ \hline\end{tabular}

Ask by Turnbull Reeves. in the United States
Feb 24,2025

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Answer

The optimal number of orders per year is approximately 21.

Solution

We start by finding the annual demand. The store begins each month with 1150 phasers in stock and then reorders, so the annual demand (D) is   D = 1150 phasers/month × 12 months = 13,800 phasers/year. The Economic Order Quantity (EOQ) model gives the optimal order quantity (Q*) as   Q* = √[(2 × D × Fixed Order Cost) / Carrying Cost per Unit]. Here,   Fixed Order Cost (S) = $560 per order,   Carrying Cost (H) = $36 per phaser per year. Plug in the values:   Q* = √[(2 × 13,800 × 560) / 36]. Calculate the numerator:   2 × 13,800 = 27,600,   27,600 × 560 = 15,456,000. Now divide by 36:   15,456,000 / 36 ≈ 429,333.33. Taking the square root gives:   Q* ≈ √429,333.33 ≈ 655 phasers per order. The optimal number of orders per year (n*) is then determined by   n* = D / Q* = 13,800 / 655 ≈ 21.1 orders per year. Thus, the optimal number of orders per year is about 21.

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To tackle this problem, we can use the Economic Order Quantity (EOQ) model. First, we need to determine the demand for the phasers. Assuming the store sells all 1150 phasers by the end of each month, the annual demand (D) would be \( 1150 \text{ phasers/month} \times 12 \text{ months} = 13,800 \text{ phasers/year} \). Next, we need to find the optimal order quantity (Q). The formula for EOQ is: \[ Q^* = \sqrt{\frac{2DS}{H}} \] where \( D \) is the annual demand, \( S \) is the fixed order cost, and \( H \) is the carrying cost per unit per year. Plugging in the values: \[ D = 13,800 \text{ phasers/year} \\ S = 560 \\ H = 36 \] \[ Q^* = \sqrt{\frac{2 \times 13,800 \times 560}{36}} \\ Q^* = \sqrt{\frac{15,424,800}{36}} \\ Q^* \approx \sqrt{428,000} \\ Q^* \approx 655.74 \] We round this to the nearest whole number, so the optimal order quantity (Q) is 656 phasers. Now, we calculate the optimal number of orders per year (N): \[ N = \frac{D}{Q^*} = \frac{13,800}{656} \approx 21.04 \] Rounding down, the optimal number of orders per year is approximately 21. So, the optimal number of orders per year is **21**.

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