Determine the economic order quantity, Cost Accounting

A retailer knows the annual demand for one of its product is 100,000 units, the ordering costs are £25 per order and the average carrying cost per unit is 35 pence. You are required to:

1. Determine the Economic Order Quantity given the data above.

2. Produce sensitivity analysis assuming a change of up to 10% up or down on each of the factors individually and on all factors simultaneously.

3. Make a final recommendation to the board of the company, as to the number of units it should include in each order.

 

Posted Date: 3/18/2013 5:08:42 AM | Location : United States







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