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Economic Order QuantityDemand = 10,000 Annual Requirements or DemandCost per item = $ 150.00 Purchase cost per UnitA = $ 1,500,000 Annual Usage, in dollarsB = $ 125.00 Administrative costs per order of placing the orderC = 28%Carrying costs of the inventory (expressed as an annual percentageEOQ value = $ 36,596.25 (exact value)EOQ units =244 (rounded number)Using this inventory management system, every time that you need to order this item, you buyEXTRA: What if your supplier requires you to purchase only in Cases of 60 units each? How much extraHint -- use the the table on the "Chart data" tab for the computation of "Total Annual Cost" forWhen to order is another question…. See the next assignment to compute the Reorder Point.
e of the inventory dollar value)y EOQ of them!a would this cost in a year?r your EOQ and the best Case Lot.$50,000 $100,000 $150,000 $200,000 $250,000 Inventory Costs98001000010200 1040010600$- HOTQuantity per OrderAnnual Cost
Holding CostOrdering CostsTotal Cost
Demand =10,000 Annual Requirements or DemandA =1500000 Annual Usage, in dollars