Essay
A local furniture store is examining its inventory policy and considering using an economic order quantity (EOQ) approach for a popular table set that they have had difficulty keeping in stock.They have the following information about the table set:
Annual demand = 3,920 sets
Current order quantity = 80 sets
Carrying cost = $80.00/set/year
Order cost = $200
a.What is the current total annual cost (TC)?
b.What is the EOQ?
c.What is the total annual cost at the EOQ?
Correct Answer:
Verified
a.TC = (Q/2) Co + (D/Q) Ch
= (80/2) 80 + (...View Answer
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Correct Answer:
Verified
= (80/2) 80 + (...
View Answer
Unlock this answer now
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