Question
Mr. Busfield recently completed a course in logistics management and now realizes that there are significant costs associated with ordering and maintaining inventory at this
Mr. Busfield recently completed a course in logistics management and now realizes that there are significant costs associated with ordering and maintaining inventory at this distribution center. Mr. Busfield has learned that the EOQ is the replenishment logic that minimizes costs. In an effort to find the EOQ for measuring cups, Mr. Busfield has gathered relevant data. Mr. Busfield expects to sell 50000 measuring cups this year. Mr. Busfield acquires the measuring cups for 75 cents each from Shatter Industries. Shatter charges $8 for processing each order. In addition, Mr. Bushfield estimates his company's inventory carrying cost to be 12 percent of cost of measuring annually.
1. Find the EOQ ? 2. Find the average inventory? 3. Find the number of orders per year? 4. Find the total cost of ordering and holding inventory?
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