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A Sugarland based company uses EOQ inventory model for SKU #A156 which has an annual demand of 400,000, order cost of $35 per order,
A Sugarland based company uses EOQ inventory model for SKU #A156 which has an annual demand of 400,000, order cost of $35 per order, and inventory carrying cost of 22%. Each unit costs $9 Based on the information, EOQ, Number of Orders per year, cost of ordering and cost of carrying are for A156 are-
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To calculate the Economic Order Quantity EOQ and related metrics for SKU A156 we can use the EOQ formula EOQ 2 D S H Where D Annual demand for SKU A156 400000 units S Order cost per order 35 H Inventory carrying cost as a percentage of unit cost 22 of 9 1 EOQ EOQ 2 400000 35 9 022 28000000 198 1414141414 375957 The EOQ for ...
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Cost Accounting
Authors: William K. Carter
14th edition
759338094, 978-0759338098
