You are the purchasing manager and you buy a raw material having the following information: Annual demand = 900 units Fixed order quantity = 260 units Order cost = $100 / order Inventory carrying cost = 25% Per unit purchase cost = $10 / unit Safety stock = 30 On average, what is the dollar value of inventory that you will have for this material?

=2983.25

Explanation:

In calculating the inventory on raw materials you will have to Add together the original value of raw materials, the works in progress if any and finished goods to get starting total inventory.

The solution to the question can be calculated like this:

EOQ=

EOQ=268.328

EOQ+SAFETY STOCK=268.328+30

=298.325

VALUE=298.325*10

=2983.25

first one

explanation:

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.