Economic Order Quantity (EOQ) is a method used to calculate the ideal quantity to order. The underlying concepts of EOQ is the balance between ordering cost and holding cost. perform two calculations: A = annual demand = 20,000 Cp = Cost of an order which includes preparing and following up the order = $100.00 Ch = Unit inventory cost per year or item cost (P) $100 times annual carrying cost rate (r) (25%) 1. Use an excel file to calculate the EOQ order. Follow the video provided:

The EOQ, or ideal order quantity, is how much your company should order. It restricts the expenses…

Answered: Economic Order Quantity (EOQ) is a…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Economic Order Quantity (EOQ) is a method used to calculate the ideal quantity to order. The underlying concepts of EOQ is the balance between ordering cost and holding cost.

perform two calculations:

A = annual demand = 20,000
Cp = Cost of an order which includes preparing and following up the order = $100.00
Ch = Unit inventory cost per year or item cost (P) $100 times annual carrying cost rate (r) (25%)

1. Use an excel file to calculate the EOQ order. Follow the video provided:

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