17.14. EOQ

a. What are the carrying costs?

Carrying costs =

b. What are the restocking costs?

Restocking costs =

c. Should the company increase or decrease its order size? Show work by calculating the EOQ, and number of orders per year.

EOQ =

The number of orders per year =

Is the firms policy optimal, why?

14. EOQ. The Trektronics store begins each month with 740 phasers in stock. This stock is depleted each month and reordered. If the carrying cost per phaser is $26 per year and the fixed order cost is S340, what is the total carrying cost? What is the restocking cost? Should the company increase or decrease its order size? Describe an optimal inventory policy for the nd order frequency