Morgan Arthur has spent the past few weeks determining inventory costs for Armstrong, a toy manufacturer located near Cincinnati, Ohio. Morgan knows that annual demand will be 30,000 units per year and that the carrying cost will be $1.50 per unit per year. The ordering cost, on the other hand, can vary from $45 per order to $50 per order. During the past 450 working days, Morgan has observed the following frequency distribution for the ordering cost: 

Morgan’s boss would like Morgan to determine an EOQ value for each possible ordering cost and to determine an EOQ value for the expected ordering cost.

Transcribed Image Text:

ORDERING COST $45 $46 $47 $48 $49 $50 FREQUENCY 85 95 90 80 55 45