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Applied Technologies Inc. wishes to develop an optimal inventory policy for its main product, namely, disk drives. After some research, the materials manager at Applied
Applied Technologies Inc. wishes to develop an optimal inventory policy for its main product, namely, disk drives. After some research, the materials manager at Applied Technologies establishes that the assumptions of the basic EOQ model are valid for her company and this product. She also determines the following parameters.
A Annual demand disk drives per year.
N Number of working days in a years at Applied Tech days per year
H Holding Cost per year for each disk drive $driveyear
S Ordering Cost per order $
Based on the information given above, The optimal order quantity, as given by Qalso called the EOQ is equal to
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