The Burdell Company is a small manufacturing company that uses gear assemblies to produce four different models of mountain bikes. One of these gear assemblies, the "Smooth Shifter", is used for the two most expensive of Burdell's four models, and has an estimated annual demand of 300 units. Burdell estimates the cost to place an order is $40, and the holding cost for each assembly is $60 per year. The company operates 250 days per year. Use the information in Scenario 9.2. What is the cycle length (time between orders) when orders are placed using the EOQ quantity

Question

10-12-2019
Physics

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The Burdell Company is a small manufacturing company that uses gear assemblies to produce four different models of mountain bikes. One of these gear assemblies, the "Smooth Shifter", is used for the two most expensive of Burdell's four models, and has an estimated annual demand of 300 units. Burdell estimates the cost to place an order is $40, and the holding cost for each assembly is $60 per year. The company operates 250 days per year. Use the information in Scenario 9.2. What is the cycle length (time between orders) when orders are placed using the EOQ quantity

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wagonbelleville wagonbelleville · Answer 1 · 2019-12-11T08:09:57+01:00

Answer:

T= 16.67 days

Explanation:

given,

annual demand (D) = 300 units

Ordering cost (S) = $40

Holding cost (H) = $60 per year

n = 250 days per years

Economic order quantity Q

[tex]Q = \sqrt{\dfrac{2DS}{H}}[/tex]

[tex]Q = \sqrt{\dfrac{2\times 300 \times \$ 40}{\$ 60}}[/tex]

[tex]Q = \sqrt{400}}[/tex]

Q = 20 units

now, demand per day

[tex]d = \dfrac{D}{n}[/tex]

[tex]d = \dfrac{300}{250}[/tex]

d = 1.2 units/day

now cycle length will be equal to

[tex]T = \dfrac{Q}{d}[/tex]

[tex]T = \dfrac{20}{1.2}[/tex]

T= 16.67 days

Tundexi Tundexi · Answer 2 · 2022-03-03T12:29:00+01:00

When the orders are placed using the EOQ quantity, the cycle length will be 16.67 days.

Given information

Annual demand (D) = 300 units

Ordering cost (S) = $40

Holding cost (H) = $60 per year

N = 250 days per years

[tex]Q = \sqrt{ 2DS/ H} \\Q = \sqrt{ 2*200*40/ 6} \\Q = \sqrt{400} \\Q = 20 \\[/tex]

Demand per day = D/N

Demand per day = 300 units / 250 days

Demand per day = 1.2 units/day

Cycle length (T) = Q / D

Cycle length (T) = 20 / 1.2

Cycle length (T) = 16.66666

Cycle length (T) = 16.67 days.

In conclusion, when the orders are placed using the EOQ quantity, the cycle length will be 16.67 days.