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Suppose you are working as an inventory manager with Walmart. You are assigned with the task to determine EOQ for a batch of order

 


Suppose you are working as an inventory manager with Walmart. You are assigned with the task to determine EOQ for a batch of order containing three different items. The respective annual demand for these items is 1000, 2000, and 3000 units respectively. The cost of item 1, 2, and 3 are 50, 100, and 80, respectively. Order cost for each item is also different i.e. 150 for Item 1, 140 for Item 2, and 130 for Item 3. The maximum amount that can be used for purchasing the goods are $25,000 (Note that it includes the total cost of each item multiplied by their respective EOQ amount) and inventory holding cost for the company is 0.10 per unit. Avoiding the basic assumption of EOQ, i.e. only a single item should be considered in a single order, determine the optimal order quantity for each items.

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