Compute the economic order quantity

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Reference no: EM131654907

A production unit uses a particluar component at the rate of 360 units per year. The holding cost for this ingredient is $0.80 per unit per year and the ordering costs are $100 per order

a) Compute the Economic Order Quantity (EOQ)

b) Assuming a 250 a day work year, how many orders should be placed per year?

c) What is the expected time between orders?

d) What is the total cost of inventory?

e) the production unit has discovered that its annual demand was wronglyu forecasted. instead of 360 units, it is actually 500 units. what should be the correct annual total cost of inventory?

Reference no: EM131654907

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