Toowoomba Seed and Herbicide (ToSH) buys 20 litre drums of Rounddown herbicide by the pallet...
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Toowoomba Seed and Herbicide (ToSH) buys 20 litre drums of Rounddown herbicide by the pallet of 50 drums. Each drum sells for $200 and costs $150 landed in the store. About 3000 drums of this size are sold each year. Occasionally (averaging one drum in every 8 pallets) a drum is holed in the store and is unsaleable. It costs $10 additionally to dispose of the holed drum and contents and clean up the mess. Other holding costs average $10 per pallet. Order costs are estimated to be $1. What is the EOQ?
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