A company has an annual demand for 2,400 units of inventory. The cost of placing an order is $100 each time, and the cost to store each item of inventory is $3 per year. Calculate the optimal order quantity.

A company has an annual demand for 2,400 units of inventory. The cost of placing an order is $100 each time, and the cost to store each item of inventory is $3 per year. Calculate the optimal order quantity.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 6E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...

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Question

Financial Accounting

A company has an annual demand for 2,400 units of inventory.
The cost of placing an order is $100 each time, and the cost to
store each item of inventory is $3 per year. Calculate the
optimal order quantity.

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