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EOQ with Delayed Payment Example 1 0 . Company A buys a certain brand of mp 3 player periodically. Demand for this product is 2

EOQ with Delayed Payment
Example 10. Company A buys a certain brand of mp3 player periodically. Demand for this product is 2080 units annually. The unit purchase cost is $10. The fixed cost of ordering is $25 per order, and the holding cost rate is 0.26$$?? yr. Calculate EOQ. Consider that Company A made an agreement with its supplier that the payment can be done one year later than the purchase. Calculate the optimal order quantity in this case. Assume that the supplier of Company A want to have purchase orders of at least 250 units. Then, how long the payment should be delayed in order to meet this target. Develop an all-units quantity discount scheme that is equivalent to delaying the payment for 6 months.
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