Inventory Management

Inventory Management

Inventory Management at Big10Sweaters.com



X0 = = = 2000 units

Big10Sweaters.com should initiate an order policy requiring lot shipments of size 2000 units.

Ke = = = 150 MU

Total Cost = Ka + Ke = 10000  1.50 + 150 = 15150 MU

to = (Xo / C) (365 = (2000 / 10000)365 = 73 days

N0 = C/Xo = 10000/2000 = 5 orders / year



The EOQ:

XO = = = 624.26 valves

The new total inventory costs are:

Ke== =171.27 MU

The EOQ and total inventory costs from when the Big10Sweaters.com were delivered all at once were

EOQ = 524.4 valves Ke = 209.76 ...