Podcast
Questions and Answers
What does the symbol D represent in the given content?
What does the symbol D represent in the given content?
What is the ordering cost per order (Co)?
What is the ordering cost per order (Co)?
What is the holding cost per pump per year (Cs)?
What is the holding cost per pump per year (Cs)?
What is the price per pump (P)?
What is the price per pump (P)?
Signup and view all the answers
How many pumps are purchased annually by Sumco Pump Co.?
How many pumps are purchased annually by Sumco Pump Co.?
Signup and view all the answers
Study Notes
EOQ Example: Sumco Pump Co.
- Sumco Pump Co. purchases pumps from a manufacturer and sells them to retailers.
- The company's annual demand (D) is 1200 pumps.
- The cost of placing an order (Co) is £10 per order.
- The cost of storing a pump (Cs) is £1.35 per pump per year.
- The purchase price of a pump (P) is £7.
Calculating Order Quantity
- To determine the optimal order quantity, the company needs to consider the annual demand, ordering cost, storage cost, and purchase price.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Calculate the Economic Order Quantity (EOQ) for Sumco Pump Co., a company that buys pumps from a manufacturer and sells to retailers. The EOQ problem involves determining the optimal order quantity based on annual demand, cost per order, and cost per unit.
