Question

If D = 7,800 per month, S = $44 per order, and H = $2.50 per unit per month,

A. what is the economic order quantity?

B. How does your answer change if the holding cost doubles?

c. What if the holding cost drops in half?

Answer 1

Inventory management is the process by which inventory and stock items are supervised. Inventory management is the proper management of flow of goods from manufacturers to warehouses to the point of sale. Economic order quantity is the optimal quantity that minimize the inventory cost. The total ordering cost and holding cost are the optimal level of order quantity and order cost of inventory is directly proportional to the EOQ. Since inventory management focus on minimizing the total cost ( ordering cost, holding cost and sometimes purchase cost), so minimizing the cost of holding inventory is the objective of inventory management.

Da 2 50 hswer 523.98 370 5 311 uit neuo 2 50$1'25 2 1'25