A company deviates from the EOQ policy and decides to order on a fixed monthly schedule. Given the following characteristics: Annual demand = 48,000 units; Ordering cost = $60/order; Annual holding cost = $2 per unit/year; Operating days per year = 240 days; and the EOQ (calculated by the standard formula) is 800 units, what is the cycle time in days when ordering monthly and how does it compare to the EOQ cycle time?

Question

Answer

Monthly cycle time is 20 days, which is 2 times longer than the EOQ cycle time

Answer

Monthly cycle time is 10 days, which is 2.5 times longer than the EOQ cycle time

Answer

Monthly cycle time is 4 days, equal to the EOQ cycle time

Answer

Monthly cycle time is 20 days, which is 5 times longer than the EOQ cycle time

Crowdly

A company deviates from the EOQ policy and decides to order on a fixed monthly s...

Want instant access to all verified answers on moodle.essca.fr?