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What is the optimum order size-massa machine tool

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Reference no: EM132681992

Massa Machine Tool expects total sales of $60,000. The price per unit is $10. The firm estimates an ordering cost of $25 per order, with an inventory cost of $0.70 per unit.

a) What is the optimum order size?

2 x 6000 x 25/.70 = 655 units

b) What is average inventory under EOQ?

c) Calculate total annual inventory cost under EOQ.

d) How many orders will be placed a year?

Reference no: EM132681992

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