Question

A company makes bicycles. It produces 450 bicycles a month. It buys the tires for bicycles
from a supplier at a cost of $20 per tire. The company's inventory carrying cost is estimated to
be 15% of cost and the ordering is $50 per order.
a. Calculate the number of orders per year?​

Answer 1

Answer:

This question is very confusing

Answer 2

Explanation:

Given A company makes bicycles. It produces 450 bicycles a month. It buys the tires for bicycles from a supplier at a cost of $20 per tire. The company's inventory carrying cost is estimated to be 15% of cost and the ordering is $50 per order.

a. Calculate the number of orders per year?

• Given A company produces in 1 month 450 bicycles
• So in 12 months we get 450 x 12 = 5400 bicycles
• So for 1 bicycle there are 2 tyres
•    So 5400 bicycles we get 5400 x 2 = 10,800 tyres.
• So the cost of per order is $ 50
• So the carrying cost will be 15% of $ 20
•                                           = 15/100 x 20
•                                           = $ 3 for one unit one year.
• Economic order quantity = √ 2 x 10,800 x 50 / 3
•                                         = √3,60,000
•                                    = 600 tyres.
• Therefore number of orders per year will be annual demand /EOQ
•                                                                    = 10,800 / 600
•                                                                      = 18 orders per year.

Reference will be

https://brainly.in/question/30645313