Fixed quantity system, Mobius Designs is a construction

Fixed quantity system

Reference no: EM131441241

Mobius Designs is a construction company that must carry inventory of cement to fulfill their workorders. They expect the annual demand to be 10,000 tanks of cement. Assume that they operate 52 weeks a year. Each time they place an order it costs $35. Factoring in the cost of capital and storage, leads to a holding cost of $2 per unit per year. Once the manager places an order, he must wait 3 weeks before he receives his order.

Using the EOQ model for a FQS (fixed quantity system), determine the optimal quantity to order each time the manager places an order.

Reference no: EM131441241

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