The demand for product is 600 units per week, and the items are withdrawn uniformly. The items are ordered, and the setup cost is $25. The unit cost of each item is $3, and the inventory holding cost is $0.05 per item per week.Assuming shortages are not allowed, determine how often to order and what size should it be.If shortages cost is $2.00 per item per week, determine how often to order and what size it should be.

Economic Order Quantity (EOQ) is a production-scheduling method where the business orders an optimum…

Answered: The demand for product is 600 units per…

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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The demand for product is 600 units per week, and the items are withdrawn uniformly. The items are ordered, and the setup cost is $25. The unit cost of each item is $3, and the inventory holding cost is $0.05 per item per week.

Assuming shortages are not allowed, determine how often to order and what size should it be.
If shortages cost is $2.00 per item per week, determine how often to order and what size it should be.

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