Question
Company A can order only in specific quantities of Q = 1; 10; 50; 100; 200; 500, and 1000 units. It is estimated that A
Company A can order only in specific quantities of Q = 1; 10; 50; 100; 200; 500, and 1000 units. It is estimated that A = $10 per order, and r = 0.25$/$/yr. a. Develop a rule to find the best order quantity for a product according to their D and v values. (Draw the table of the best order quantity versus a variable involving D and v). b. For an item with D = 500 units/year and v = $0.10 / unit. What is EOQ for this item? What is your suggested order quantity based on your previous analysis? What is the cost penalty associated with the use of this Q different from EOQ?
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