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Essay's paper info
| Topic: |
Business
|
| Number of pages / Number of words: |
7 / 1869 |
Essay's paper body
Note properly utilized
5- The individual re-order levels have not been reviewed for several years these were originally based on two weeks' average sales at that time not considering current market demands.
6- Reduce level of confidence from distributors due to delay of order received.
7- Distributor receiving orders in several batches which lead in increase their administrative cost...
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The batch size is calculated by a formula that minimizes the cost through balancing the set up cost against the cost of stock.
EBQ=sqrt(2*D Sc/CH)where D is annual demand, Sc is set up cost, C is unit variable cost and H is unit holding cost
[pic]
- D=Annual demand
- S=Setup cost
- C=unit variable cost
- H= holding cost per unit
- P= Production rate
_____________
EBQ = / = 2*500*50000 = 8165
v 3...
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