EOQ Analysis Tiger Corporation purchases 1,240,000 units per year of a component. The fixed cost per order is $27. The annual holding cost of the
EOQ Analysis Tiger Corporation purchases 1,240,000 units per year of a component. The fixed cost per order is $27. The annual holding cost of the item is 26.7% of its cost of $2.04.
. Determine the EOQ if (1) the conditions stated above are met, (2) the order cost is zero instead of $27, and (3) the order cost is $27 but the carrying cost is $0.01.
b. What do your answers illustrate about the EOQ model? Explain.
a. (1) If there are no changes in costs, the EOQ is ___ units. (Round to the nearest integer. For infinity, enter INF)
Step by Step Solution
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There are 3 Steps involved in it
Step: 1
To determine the Economic Order Quantity EOQ in different scenarios we can use the EOQ formula EOQ 2 D S H Where D Annual demand number of units purch...
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Step: 2
Step: 3
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Authors: Chad J. Zutter, Scott B. Smart
15th edition
013447631X, 134476315, 9780134478197 , 978-0134476315
