Consider an item whose demand rate is 100 units per year and that costs $40 per unit.
Question:
Consider an item whose demand rate is 100 units per year and that costs $40 per unit. If the fixed cost of ordering is $50 and the carrying charge is 25%, answer the following:
a. Find the EOQ.
b. The purchasing manager is trying to understand the reasons for the high cost of ordering. In this process, she wonders how low A must become for the EOQ to equal 1 unit.
What value of A will she find?
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Related Book For 
Inventory And Production Management In Supply Chains
ISBN: 9781032179322
4th Edition
Authors: Edward A Silver, David F Pyke, Douglas J Thomas
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