Sec uses 60 000 tons of salt over a 50-week working year. It costs 100 to order
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Sec uses 60 000 tons of salt over a 50-week working year. It costs £100 to order salt and delivery follows two weeks later. Storage costs for the salt are expected to be £0.10 per ton per year. The current practice is to order twice a year when the inventory falls to 10 000 tons (all orders are equal in size). Recommend an ordering policy for Sec using the Economic Order Quantity model and contrast its cost with the cost of the current policy.
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Related Book For
Corporate Finance Principles And Practice
ISBN: 9780273725343
5th Edition
Authors: Denzil Watson, Antony Head
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