Question
Pearl Inc. uses 64 kilograms of material X per year. Material X costs $35.00 per kilogram. It costs $2.00 to place an order and $4.00
Pearl Inc. uses 64 kilograms of material X per year. Material X costs $35.00 per kilogram. It costs $2.00 to place an order and $4.00 per kilogram to store material X. Currently, Pearl is ordering material X in 14-kilogram batches. Is this the most economical order size? If not, what is the economic order quantity? How much will Pearl save by using the EOQ? (Round answers to 2 decimal places, e.g. 125.74.)
| Economic order quantity | kilo grams | ||
| Pearl will save | $ | per year |
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Principles Of Managerial Finance
Authors: Lawrence J. Gitman, Chad J. Zutter
14th Global Edition
9781292018201
