Essay
Echo Sound Ltd.makes musical instruments.One of their products is a banjo that has an annual demand of 3,000 units.The setup cost for each production batch is $900; it costs $15 to carry a banjo in inventory for one year.Required:
1.What is the total annual relevant batch set up and carrying cost if the company uses the economic order quantity? Assume that setup costs are the same as ordering costs.2.The company is switching to a just-in-time system.The average order size is 200 banjos.What is the total annual relevant batch set up and caring cost?
3.Compare the Enterprise Resource Planning EOQ model with the JIT model.What are the advantages and disadvantages of each?
Correct Answer:
Verified
1.EOQ = 
EOQ = 600
Total orders per year...View Answer
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Correct Answer:
Verified
EOQ = 600Total orders per year...
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
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