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What is the approx. total cost a retailer would incur if it were to develop and follow an EOQ ordering policy for an air
What is the approx. total cost a retailer would incur if it were to develop and follow an EOQ ordering policy for an air purifier it sells? Historical data shows that: D-1000 units/mo. Ordering cost $4000/order, each unit costs $500 and holding costs are 20% of the cost/unit/yr. (Hint: Compute EOQ first and use it to derive # of orders/yr) EOQ = Sq Rt of (2xDxS)/H where Dannual demand, S avg cost of placing an order, H holding cost in $ of keeping 1 unit of that SKU in stock for 1 year TC TOC THC TOC # orders/yr (round down this #)" cost of placing an order, THC Avg. Inventory (qty) cost of holding 1 piece for 1 year; Avg. Inventory (Beg Inv + End Inv. 1/2 CO $102,000 approx O $99000 approx. O $94000 approx. O $97000 approx.
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