ENTREPRENEURIAL OPERATIONS
INVENTORY MANAGEMENT
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
The order cost per order of an inventory is RM400 with an annual carrying cost of RM10 per unit. The economic Order Quantity (EOQ) for an annual demand of 2000 units
|
|
400
|
|
|
440
|
|
|
480
|
|
|
500
|
Explanation:
Detailed explanation-1: -Thus, the Economic Order Quantity (EOQ) for an annual demand of 2000 units is → 400.
Detailed explanation-2: -Average inventory held is equal to half of the EOQ = EOQ/2. The number of orders in a year = Expected annual demand/EOQ. Total annual holding cost = Average inventory (EOQ/2) x holding cost per unit of inventory.
Detailed explanation-3: -Economic order quantity (EOQ) is a calculation companies perform that represents their ideal order size, allowing them to meet demand without overspending. Inventory managers calculate EOQ to minimize holding costs and excess inventory.
There is 1 question to complete.