Problem 1
Co 12
Ch 1.4 EOQ 327
D 6240
Demand increases 4 times
Co 12
Ch 1.4 EOQ 654
D 24960
The demand in the nominator in the square root increases 4 times so EOQ increases 2 times
Holding cost reduces 4 times
Co 12
Ch 0.35 EOQ 654
D 6240
The holding cost in the denominator in the square root decreases 4 times so EOQ increases 2 times
Ordering cost reduces 4 times
Co 3
Ch 1.4 EOQ 164
D 6240
The ordering cost in the nominator in the square root decreases 4 times so EOQ decreases 2 times
Problem 2
Co 12
H 14% EOQ 327
D 6240
Change the range of quantity to the levels of 500 units
Quantity Price
1-499 10
500-1000 9.75
1000-1499 9.5
1500-2000 9.4
2000 + 9
EOQ (1-499) 327 Q*= 327 TC (327) 62857.89
EOQ (500 - 1000) 331 Q*= 500 TC (500) 61331.01
EOQ (1000 - 1499) 336 Q*= 1000 TC (1000) 60019.88
EOQ (1500 - 2000) 337 Q*= 1500 TC (1500) 59692.92
EOQ (2000+) 345 Q*= 2000 TC (2000) 57457.44
Since ordering with Q = 2000 has the smallest total cost, it is the optimum order quantity
Change the discount price to the level of 0.5 USD
Quantity Price
1-299 10
300-599 9.5
600-999 9
5000-4999 8.5
5000 + 8
EOQ (1-299) 327 Q*= 0 TC (0) 0
EOQ (300-599) 336 Q*= 336 TC (336) 59726.3
EOQ (600-999) 345 Q*= 600 TC (600) 56662.8
EOQ (1000-4999) 355 Q*= 1000 TC (1000) 53709.88
EOQ (5000 +) 366 Q*= 5000 TC (5000) 52734.98
Since ordering with Q = 5000 has the smallest total cost, it is the optimum order quantity
Problem 7
0 < Q < 1000 5
1000 <= Q < 2000 4.9
2000 <= Q 4.75
r 0.3
A 25
Item 1 D 10000 Q*
EOQ (0 - 1000) 577.350269 577
EOQ (1000 - 2000) 583.211844 1000
EOQ (2000+) 592.348878 2000
TC (0 - 1000) 50866.0256
TC (1000 - 2000) 49985
TC (2000+) 49050
Item 2 D 1000 Q*
EOQ (0 - 1000) 182.574186 183
EOQ (1000 - 2000) 184.427778 1000
EOQ (2000+) 187.317162 2000
TC (0 - 1000) 5273.862
TC (1000 - 2000) 5660
TC (2000+) 6187.5
Item 3 D 4000
EOQ (0 - 1000) 365.148372 365
EOQ (1000 - 2000) 368.855557 1000
EOQ (2000+) 374.634325 2000
TC (0 - 1000) 20547.7226
TC (1000 - 2000) 20435
TC (2000+) 20475
Item 4 D 130000
EOQ (0 - 1000) 2081.666 0
EOQ (1000 - 2000) 2102.80021 0
EOQ (2000+) 2135.74425 2136
TC (0 - 1000) 0
TC (1000 - 2000) 0
TC (2000+) 50543.44
Problem 6
0 < Q < 300 10
Q >= 300 9.7
A 25
r 0.26
d 40/week
D (year) 2080
a)
EOQ (0 - 300) 200 200
EOQ (300+) 203.069233 300
TC (0 - 300) 21320
TC (300+) 20727.63
b)
EOQ 500
EOQ = sqrt(2*A*D/P*r) => P = 2*A*D/EOQ^2*r
P 1.6 dollar
Problem 4
D year 4000
A 5
v per 100 units 4
r 0.25
a)
EOQ 2000
b)
T 0.5 year 6 months
c)
D 3 months 1000
v per 100 units 4
r 0.25
EOQ 3 months 1000
