You purchase industrial cleaning solution in 40-gallon containers and use an average of 825 containers per year. The cost to prepare and receive an order is $9 per order. Annual carrying costs are $65 per container. Determine the 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 8E: Melchar Company uses 78,125 pounds of oats each year. The cost of placing an order is 18, and the...
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You purchase industrial cleaning solution in 40-gallon containers and
use an average of 825 containers per year. The cost to prepare and
receive an order is $9 per order. Annual carrying costs are $65 per
container. Determine the EOQ.
Transcribed Image Text:You purchase industrial cleaning solution in 40-gallon containers and use an average of 825 containers per year. The cost to prepare and receive an order is $9 per order. Annual carrying costs are $65 per container. Determine the EOQ.
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