An assistant manager is reviewing the costs associated with one of

Question

An assistant manager is reviewing the costs associated with one of the store's better-selling products. The data available follows.

Demand = 400 units/year

Order cost = $25/order

Holding cost = 50/unit/year

a. They currently order a one-year supply. What are the total annual ordering cost and holding cost for this order size?

b. What would be the EOQ and its associated ordering and holding costs?

Answer

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