Covey Ltd. uses 2,250 metres of fine gage brass each year. Brass wire costs $12 per metre,

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Covey Ltd. uses 2,250 metres of fine gage brass each year. Brass wire costs $12 per metre, ordering costs are $50 per order, and carrying costs are $2.50 per metre. Currently, Covey orders 500 metres in each order. Is this the most economical order size? If not, what is the economic order quantity? How much will Covey save using the EOQ?

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Cost Management Measuring, Monitoring And Motivating Performance

ISBN: 1601

3rd Canadian Edition

Authors: Leslie G. Eldenburg, Susan K. Wolcott, Liang Hsuan Chen, Gail Cook

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