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Economics Order Quantity (EOQ) formula. logistics Management HW

 

 

 

Answer the follow question utilizing the EOQ formula. In order to answer the question you will have to had experience using the EOQ formula. if you dont have the experience dont request to do the asssignment. thank you.

 

You are one of the Item Managers for the USCG HH-60T.  Your desk is responsible for insuring the Coast Guard fleet of 41 Thunderhawk helicopters never runs out of Active Matrix Liquid Crystal displays.  Because this is a new system for the Coast Guard your only source of historical data is from the US Army that operates a similar aircraft. The US Army fleet of 204 helicopters of very similar helicopters replaced 420 displays last year.  You know that each display costs $999.  The Chief of the Aviation Logistics Division now demands that all costs for receiving, warehousing, and utility overhead will be paid by the Item Manager, this jacks up your inventory carrying cost to 14% annually.  You have worked out a deal with Rockwell Collins, the supplier of the displays that you will pay $350 for every delivery if they guarantee their arrival undamaged.  What is the EOQ? How many times per year will you order displays?

 

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