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Set up the Economic Order Quantity model given the information below. Annual Demand 50,000 units Order Cost $150 per order Unit...

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Question

General Management

Set up the Economic Order Quantity model given the informationbelow.

Annual Demand

50,000 units

Order Cost

$150 per order

Unit Cost

$100 per unit

Inventory Holding

     15% of unit cost

What is the Economic Order Quantity of the product?

What is the total annual cost when EOQ is ordered each time?

Answer & Explanation Solved by verified expert
3.9 Ratings (463 Votes)
Given are following details Annual demand of bath towels D 175 month x 12 months 2100 Order placement cost Co 12 Annual unit inventory carrying cost Ch 27 of 250 0675 Optimal order quantity Square root 2 x Co x D Ch Square root 2 x 12 x 2100 0675 27325 273    See Answer
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