A manufacturing company uses the Economic Order Quantity (EOQ) model for inventory management. Calculate the total annual inventory cost (TC) given: • Annual demand (D) = 8,000 units • Ordering cost (S) = $40 per order • • • Holding cost (H) = $5 per unit per year EOQ (Q) 500 units = Unit cost (p) = $75

A manufacturing company uses the Economic Order Quantity (EOQ) model for inventory management. Calculate the total annual inventory cost (TC) given: • Annual demand (D) = 8,000 units • Ordering cost (S) = $40 per order • • • Holding cost (H) = $5 per unit per year EOQ (Q) 500 units = Unit cost (p) = $75

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 2CE: Sterling Corporation has an EOQ of 5,000 units. The company uses an average of 500 units per day. An...

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