An assistant manager is reviewing the costs associated with the stores

Question

An assistant manager is reviewing the costs associated with the store's best-selling product. The data available follows.

Demand = 500 units/year

Order cost = $40/order

Holding cost = $7/unit/year

a. What is the EOQ and its associated ordering and holding costs?

b. If annual demand doubles and all other costs remain the same, what is the new EOQ and total annual cost?

Answer

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