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The pharmacy director is evaluating order size and inventory level for one of the most widely used drugs in the hospital. Demand is 120,000 units
The pharmacy director is evaluating order size and inventory level for one of the most widely used drugs in the hospital. Demand is 120,000 units annually, the ordering cost is $50 per order, the drug costs $5.00 per unit, and the holding cost is 15% of the purchase price. Calculate the economic order quantity (EOQ) and complete the table below for total inventory cost based on order sizes ranging from 1,000 to 5,000 and the percent increase in cost for not using the optimal order size
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