Question

b. now assume that six percent of the chemical is not used and disposed of, with a disposal cost of $0.50/lb. find the eoq and total cost when disp costs are incorporated into the model. (hint: add to the holding cost the disposal cost times the percent of product that is disposed of.) round yo answer for the eoq to the nearest whole number and round your answer for the total cost to the nearest cent. use the rounded eoq value in you calculations. do not round any other intermediate calculations.
economic order quantity: ​ lb
total cost: $ ​
c. what implications do these results have for sustainability practices?
although the total cost in part b is higher ​, by adjusting the economic order quantity, the company can ​ actually save additional costs while protecting the environment.

Explanation:

To solve this, we need the basic EOQ formula and the given data (which is missing here, but typically EOQ uses demand \( D \), ordering cost \( S \), and holding cost \( H \)). Let's assume we have standard EOQ parameters (e.g., from a typical problem: \( D = 10000 \) lb/year, \( S = \$50 \) per order, \( H = \$2 \) per lb/year, disposal rate \( 6\% = 0.06 \), disposal cost \( \$0.50 \) per lb).

Step 1: Adjust Holding Cost

Holding cost \( H \) now includes disposal cost.
Disposal cost per lb: \( 0.06 \times 0.50 = \$0.03 \)
New holding cost \( H_{\text{new}} = H + 0.03 \). Assume original \( H = 2 \), so \( H_{\text{new}} = 2 + 0.03 = \$2.03 \) per lb/year.

Step 2: Calculate EOQ

EOQ formula: \( \text{EOQ} = \sqrt{\frac{2DS}{H_{\text{new}}}} \)
Assume \( D = 10000 \), \( S = 50 \):
\[
\text{EOQ} = \sqrt{\frac{2 \times 10000 \times 50}{2.03}} = \sqrt{\frac{1000000}{2.03}} \approx \sqrt{492610.84} \approx 702 \text{ lb (rounded)}.
\]

Step 3: Calculate Total Cost

Total cost (TC) formula: \( \text{TC} = \frac{D}{Q}S + \frac{Q}{2}H_{\text{new}} \) (where \( Q = \text{EOQ} \))
Substitute \( D = 10000 \), \( S = 50 \), \( Q = 702 \), \( H_{\text{new}} = 2.03 \):
\[
\frac{10000}{702} \times 50 + \frac{702}{2} \times 2.03 \approx 712.25 + 713.03 \approx \$1425.28.
\]

Note:

Since the original problem’s data (demand, ordering cost, holding cost) is not provided, the above uses sample values. For the actual problem, substitute the given \( D \), \( S \), and original \( H \) to recalculate.

Final Answer (with sample data):

• EOQ: \( \boldsymbol{702} \) lb
• Total Cost: \( \boldsymbol{\$1425.28} \) (or adjusted based on actual data)

Answer:

To solve this, we need the basic EOQ formula and the given data (which is missing here, but typically EOQ uses demand \( D \), ordering cost \( S \), and holding cost \( H \)). Let's assume we have standard EOQ parameters (e.g., from a typical problem: \( D = 10000 \) lb/year, \( S = \$50 \) per order, \( H = \$2 \) per lb/year, disposal rate \( 6\% = 0.06 \), disposal cost \( \$0.50 \) per lb).

Step 1: Adjust Holding Cost

Holding cost \( H \) now includes disposal cost.
Disposal cost per lb: \( 0.06 \times 0.50 = \$0.03 \)
New holding cost \( H_{\text{new}} = H + 0.03 \). Assume original \( H = 2 \), so \( H_{\text{new}} = 2 + 0.03 = \$2.03 \) per lb/year.

Step 2: Calculate EOQ

EOQ formula: \( \text{EOQ} = \sqrt{\frac{2DS}{H_{\text{new}}}} \)
Assume \( D = 10000 \), \( S = 50 \):
\[
\text{EOQ} = \sqrt{\frac{2 \times 10000 \times 50}{2.03}} = \sqrt{\frac{1000000}{2.03}} \approx \sqrt{492610.84} \approx 702 \text{ lb (rounded)}.
\]

Step 3: Calculate Total Cost

Total cost (TC) formula: \( \text{TC} = \frac{D}{Q}S + \frac{Q}{2}H_{\text{new}} \) (where \( Q = \text{EOQ} \))
Substitute \( D = 10000 \), \( S = 50 \), \( Q = 702 \), \( H_{\text{new}} = 2.03 \):
\[
\frac{10000}{702} \times 50 + \frac{702}{2} \times 2.03 \approx 712.25 + 713.03 \approx \$1425.28.
\]

Note:

Since the original problem’s data (demand, ordering cost, holding cost) is not provided, the above uses sample values. For the actual problem, substitute the given \( D \), \( S \), and original \( H \) to recalculate.

Final Answer (with sample data):

• EOQ: \( \boldsymbol{702} \) lb
• Total Cost: \( \boldsymbol{\$1425.28} \) (or adjusted based on actual data)