Economic order quantity-optimal order quantity

Reference no: EM13256500

VF company is a distributor of air filter to retail stores. Itbuys its filters from several manufacturers. Filters are ordered inlot sizes of 1000 and each order costs Rs 40 to place. Demand fromretail stores is 20,000 filters per month, and carrying costs is Rs0.10 a filter per month.

l. What is the economic order quantity?

ll. What would be the optimal order quantity if the carrying cost were cut in half to Rs. 0.05 a filter per month?

lll. What would be the economic order quanitity ifordering costs were reduced to Rs 10 per order?

Reference no: EM13256500

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