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A firm estimated that it uses 50,000 of a particular type of material in the product


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The Question


A firm estimated that it uses 50,000 of a particular type of material in the production. The cost of placing an order is $100 and holding cost $0.4 per unit.

Determine EOQ,

The supplier has offered a quantity discount of $0.02 per unit if the company buys batches of $100,000 units, should the company take advantage of this?


Inventory Data

 

Demand rate, D

 

Ordering/Setup cost, S

 

Holding cost, H

 

Unit Price, P

 

Results

 

Optimal Order Quantity, Q* Economic Order Quantity Model 50000

 

100

 

0.4 (fixed amount) 5000 EOQ (b).

 

Total...

 


Solution details

Solution #00070251

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A firm estimated that it uses 50,000 of a particular type of material in the product.zip

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This paper was answered on 21-Sep-2019

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