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Please show all the work, thank you and I really appreciate your time. 8.Part A has...

Please show all the work, thank you and I really appreciate your time.

8.Part A has a unit cost = $20, annual carrying charge = 9%, annual demand = 3,000 units, and ordering cost = $20 per order. 


a. What is the EOQ?

business   Operations-Management   
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Answer #1

EOQ = Sqrt(2*annual usage*ordering cost/Holding Cost)

Annual Demand=3000, given

Holding cost= cost* carrying charge=20*.09,

ordering cost=20 given

Therefore, EOQ = Sqrt(2*annual usage*ordering cost/Holding Cost)

=Sqrt(2*3000*20)/20*.09

=Sqrt(12000a) 0/1.8)

=Sqrt(66,666.67)=258.20

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