EOQ for manufacturer. Sk8 Company produces skateboards and purchases 20,000 units of a wheel bearing...
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EOQ for manufacturer. Sk8 Company produces skateboards and purchases 20,000 units of a wheel bearing each year at a cost of $1 per unit. Sk8 requires a 15% annual rate of return on investment. In addition, the relevant carrying cost (for insurance, materials handling, breakage etc.) is $0.17 per unit per year. The relevant ordering cost per purchase order is $38.40. 1. 2. 3. 4. Calculate Sk8's E00 for the wheel bearing. Calculate Sk8's annual relevant ordering costs for the E0Q calculated in requireme Calculate Sk8's annual relevant carrying costs for the E0Q calculated in requireme Assume that demand is uniform throughout the year and known with certainty so safety stocks. The purchase-order lead time is half a month. Calculate Sk8's reorde bearing Step-by-step solution
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