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The Toledo Mudhens, a minor league baseball team, breaks an average of seven bats per week

The Toledo Mudhens, a minor league baseball team, breaks an average of seven bats per week during a 38 week season. The team purchases it bats from a national supplier. The order cost is \$185 and the annual holding cost is 24 percent of the purchase price.

1. What is the annual demand for bats?
2. If bats cost \$25.00 each, what is the economic order quantity for bats?
3. What is the total annual cost associated with the EOQ quantity?
4. What impact will an increase to \$295 in the order cost have on the EOQ quantity?
5. Suppose the Mudhens break an average of 9 bats per week during the season, what impact will this have on the EOQ quantity? (Assume the order cost is \$175)

Assume the bat manufacturer offers the Mudhens the following price schedule

Order Quantity                     Price per Unit

1 – 49                                 \$25.00

50 - 143                                \$24.00

144 or more                            \$23.50

1. How many bats should the team order if the discount applies to all units?
2. What is the total annual cost associated with the best order quantity?

Nov 11 2017 View more View Less