Henderson Drapes Ltd uses 960,000 meters of fabric each year for production. The company orders fabric at a cost of $3 per meter, plus fixed ordering costs of $150 per order. The carrying cost is 15% of the inventory value at cost. Assume a 365-day year for this company. What is the company's estimated EOQ?

Henderson Drapes Ltd uses 960,000 meters of fabric each year for production. The company orders fabric at a cost of $3 per meter, plus fixed ordering costs of $150 per order. The carrying cost is 15% of the inventory value at cost. Assume a 365-day year for this company. What is the company's estimated EOQ?

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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What is the firm's estimated EOQ?
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