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Chapter 20 EOQ Thomas Corporation produces heating units. The following values apply for a part used in their production (purchased from external suppliers): D = 8,820 Q = 210 P = $ 39 C = $ 3.90 Required: 1. For Thomas, calculate the ordering cost, the carrying cost, and the total cost associated with an order size of 210 units. If required, round your answers to the nearest cent. Ordering cost 1,638 Carrying cost 409.50 Total cost 2,047.50 2. Calculate the EOQ and its associated ordering cost, carrying cost, and total cost. If required, round your answers to the nearest cent. 420 units Ordering cost 1,638 x Carrying cost 409.50 EOQ Chapter 20 2. Calculate the EOQ and its associated ordering cost, carrying cost, and total cost. If required, round your answers to the nearest cent. EOQ 420 units 1,638 x Ordering cost Carrying cost 409.50 2,467.50 x X Total cost s 3. What if Thomas enters into an exclusive supplier agreement with one supplier who will supply all of the demands with smaller, more frequent orders? Under this arrangement, the ordering cost is reduced to $0.39 per order. Calculate the new EOQ. 42 V units Feedback Check My Work 1. Ordering cost = P(D/Q) Where: P = the cost of placing and receiving an order D = the known annual demand o = the number of units ordered each time an order is placed

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