Gagohan

Introduction:

A spreadsheet is a document used to store important data’s. Other than storing data’s, spreadsheets are used in processing numbers which makes it easier to store information about a company’s balances and interests. It is also useful in a way that it can directly see the condition of the company and it can easily reflect the effects on revenue, cost, and profit in demand conditions. To exemplify the use of spreadsheets in economic analysis, The Neighborhood Pharmacy, Inc is set as an example. The Neighborhood Pharmacy, Inc. (NPI) is a small but growing operator of large-scale discount pharmacies in Boston, Massachusetts, metropolitan area, which has the primary concern on picking the order quantity that can minimize total inventory-related costs. The optimal or total-cost-minimizing order quantity is typically referred to as the “economic order quantity”. In order for them to find out the things needed to be solved for this case, a spreadsheet can be used.

Problem:

The things that needed to be solved or answered in this case is first a table or spreadsheet for NPI’s order quantity (Q), inventory – related total cost (TC), purchase price (P), use requirement (X) order cost (O), and carrying cost (C) should be constructed with a range for Q from 0 to 2000 with increments of 100. Second, based at the constructed table or spreadsheet, determine the order quantity that will minimize the company’s inventory – related total cost during the planning period. And lastly, plot the relation between inventory – related total costs and the order quantity.