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Three Jays Corporation Case Data Analysis: Comparison of Old and New Eoq (With Updated Costs)

The document compares the economic order quantity (EOQ) for five products using old and new cost data from 2010, 2012, and recommended costs. The EOQ decreases by 39-51% under the recommended costs due to a reduction in setup costs from $63.7 to $37.5 and carrying costs from 2.5-2.6% to 0.23%. Sales increased 29-37% from 2010 to 2012 while the EOQ increased 13-17% under the old method.

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Afaq Zaim
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42 views

Three Jays Corporation Case Data Analysis: Comparison of Old and New Eoq (With Updated Costs)

The document compares the economic order quantity (EOQ) for five products using old and new cost data from 2010, 2012, and recommended costs. The EOQ decreases by 39-51% under the recommended costs due to a reduction in setup costs from $63.7 to $37.5 and carrying costs from 2.5-2.6% to 0.23%. Sales increased 29-37% from 2010 to 2012 while the EOQ increased 13-17% under the old method.

Uploaded by

Afaq Zaim
Copyright
© © All Rights Reserved
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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THREE JAYS CORPORATION

CASE DATA ANALYSIS


Group Number: Team 9

Group Name: Mueed Ahmad


COMPARISON OF OLD AND NEW EOQ (WITH UPDATED COSTS)

T EOQ USING EXISTING METHOD (USING 2010 SALES DATA AND DATA GIVEN IN EXHIBIT 2)

PRODUCT (12 OZ) 3JS MARRAN KERRY DOM AAA


SALES/WK 57.56 44.9 28.69 17.04 12.02

S=SETUP COST 63.7 63.7 63.7 63.7 63.7


D=ANNUAL DEMAND (CASES) 2993 2335 1492 886 625
I=CARRYING COST 2.5506 2.7468 2.4174 2.6109 1.647
C=FULL COST/CASE 0.00946876 0.0130706 0.018002681 0.032742664 0.042112
EOQ (OLD) 387 329 280 208 220
ROP (3 WEEKS) 173 135 86 51 36
T EOQ USING EXISTING METHOD (USING 2012 SALES DATA AND DATA GIVEN IN EXHIBIT 2)

PRODUCT (12 OZ) 3JS MARRAN KERRY DOM AAA


SALES/WK 74.4 57.81 37.88 23.29 16

S=SETUP COST 63.7 63.7 63.7 63.7 63.7


D=ANNUAL DEMAND (CASES) 3869 3006 1970 1211 832
I=CARRYING COST 2.55 2.75 2.42 2.61 1.65
C=FULL COST/CASE 0.00732 0.01015 0.010465 0.02396 0.03163
EOQ (OLD) 440 373 322 243 253
ROP (3 WEEKS) 223 173 114 70 48
% INCREASE IN SALES 29.26% 28.75% 32.03% 36.68% 33.11%
% INCREASE IN EOQ 13.71% 13.40% 14.85% 16.93% 15.27%
T EOQ USING RECOMMENDED COSTS AND 2012 SALES DATA

PRODUCT (12 OZ) 3JS MARRAN KERRY DOM AAA


SALES/WK 74.4 57.81 37.88 23.29 16

S=SETUP COST 37.5 37.5 37.5 37.5 37.5


D=ANNUAL DEMAND (CASES) 3869 3006 1970 1211 832
I=CARRYING COST 0.23 0.23 0.23 0.23 0.23
C=FULL COST/CASE 25.79 27.97 24.31 24.46 23.77
EOQ (OLD) 221 187 163 127 107
ROP (3 WEEKS) 223 173 114 70 48
% INCREASE IN SALES 29% 29% 32% 37% 33%
% INCREASE IN EOQ -43% -43% -42% -39% -51%
ROP (4 WEEKS) 298 231 152 93 64

WHAT IS THE IMPACT OF SETUP COSTS AND CARRYING COSTS ON EOQ? MENTION IN 1 LINE
The change in setup cost and carrying cost has led to a decrease in EOQ of the company

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