6/15/2023 0 Comments Sports obermeyer case study pdfThe formula which we have used here to compute the EOQ is mean (z-valueSD). The service level has been calculated to be 0.75 or 75.īased on this service level, the z value has been determined from the z table, which is 0.645. These computations are shown in the excel spreadsheet and in the appendices in exhibit 1. This ratio has been found by the difference of retail price and cost divided by the difference of cost and salvage value of a unit if not sold. However, in this case the EOQ for the company would be the production order quantity for each individual type of the Parka, given that the total of all of these EOQs should be 10,000 units. The above question asks us to compute the economic order quantity for each of the individual type of the parkas.Įconomic order quantity is the optimum order quantity, which is required to be held at a minimum by a company so that it could reduce its inventory costs to a minimum level. Ignore price differences among styles in your initial analysis. Assume that all of the 10 styles in the sample problem are made in Hong Kong and that Wallys initial production commitment must be at least 10,000 units.
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