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Determine the EOQ

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Problem - Tiger Corporation purchases 1,400,000 units per year of one component. The fixed cost per order is ?$55. The annual carrying cost of the item is 27.0?% of its ?$10.00 cost.

Determine the EOQ if? (1) the conditions stated above? hold, (2) the order cost is? $1.00 rather than ?$55?, and? (3) the order cost is ?$55 but the carrying cost is ?$0.01.

What do your answers illustrate about the EOQ? model? Explain.

Reference no: EM133033074

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