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Math Help - Anybody know how to work this very very hard question out? (EQO) :) (would be nice)!

  1. #1
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    Anybody know how to work this very very hard question out? (EQO) :) (would be nice)!

    1) A local supermarket sells beauty bar soaps which are ordered from a manufacturer. Annual Demand for beauty bar soaps is 5000. The supermarket incurs an annual holding cost of 20% of purchase price and incurs a fixed order placement, transportation and receiving costs of 49 each time an order for the soaps is placed, regardless of the order quantity. The price charged by the manufacturer varies according to the following discount pricing; ( my task is to determine the quantity of beauty bar soaps that the supermarket should order each time it makes an order.)
    order quantity unit price
    0-999 5.00
    1000-2499 4.85
    2500 and over 4.75
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    Re: Anybody know how to work this very very hard question out? (EQO) :) (would be nic

    I assume you know that
    Q= \sqrt{\frac{2DS}{H}}

    S= 49
    H= 0.2Qu
    D=5000

    Where u is the unit price

    Find Q for each unit price and then find the total annual cost for each EOQ at those unit prices.

    If the EOQ for unit price 5 is 1100 it is outside the order range so just choose the quantity to be the nearest limit of the order range (so the EOQ for unit price 5 would be 999)
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    Re: Anybody know how to work this very very hard question out? (EQO) :) (would be nic

    aww thankyou for replyin hun

    well it really confuses me im doing a Business and IT degree and I really hate my maths module but theres no way out of them I have to do them!

    but I though the formulae was q*= square root of 2KD/ h (dunno how to do the little symbols)

    q is order quantity
    D is number of units demanded per year
    K is setup or ordering costs
    h is cost of holding one unit of inventory for one unit of time
    p is unit price
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    Re: Anybody know how to work this very very hard question out? (EQO) :) (would be nic

    Quote Originally Posted by Jadey View Post
    aww thankyou for replyin hun

    well it really confuses me im doing a Business and IT degree and I really hate my maths module but theres no way out of them I have to do them!

    but I though the formulae was q*= square root of 2KD/ h (dunno how to do the little symbols)

    q is order quantity
    D is number of units demanded per year
    K is setup or ordering costs
    h is cost of holding one unit of inventory for one unit of time
    p is unit price
    The is the correct equation, I just used S instead of K because wikipedia used that. And i used u instead of p.
    But I made a mistake, I took H as being the total holding cost, not holding cost per unit. As you say "The supermarket incurs an annual holding cost of 20% of purchase price" The purchase price is Qu, 20% of this is 0.2Qu and this holding cost per unit would be (0.2Qu)/Q= 0.2u

    So H= 0.2u
    D= 5000
    K= 49

    Once again, from
    Q= \sqrt{\frac{2DK}{H}}

    Q= \sqrt{\frac{2\times 5000 \times 49}{0.2u}}

    Find the EOQ for each value of u and then find out which has the lowest total cost.
    Total annual cost is given by
    Cost_{total}= 5000u+49 \frac{5000}{Q}+ 0.2Qu
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  5. #5
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    Re: Anybody know how to work this very very hard question out? (EQO) :) (would be nic

    Okii ill give it a go thankyou xxx
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