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we use 1,200 of a certain spare part that cost $25.00 for each order and has a $24.00 annual holding cost. Calculate the total cost for order sizes...

we use 1,200 of a certain spare part that cost $25.00 for each order and has a $24.00 annual holding cost. Calculate the total cost for order sizes of: 25,40,50,60,and 100. Identify the economic order quantity and consider the implications for making an error in calculating the economic order quantity.

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554148_FIN.xlsx

Computation of total cost Computation of EOQ Total cost = (D/Co)*ordering cost per order+ (EOQ/2)*Ch square root{(D*Co)/Ch} When EOQ= 25 units
Total cost = 1200/25*$25+25/2*$24
= $1500 where:
D =...

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