BUISENESS MANAGEMENT
INVENTORY MANAGEMENT
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
Given EOQ is 250 units, because of customer need to choose the best Total Cost, what is the new EOQ for this formula if the 1st range is ( 1-100 ). Choose your answer below.
|
|
250
|
|
|
50
|
|
|
100
|
|
|
1
|
Explanation:
Detailed explanation-1: -Economic Order Quantity The total cost of inventory is the sum of the purchase, ordering and holding costs. As a formula: TC = PC + OC + HC, where TC is the Total Cost; PC is Purchase Cost; OC is Ordering Cost; and HC is Holding Cost.
Detailed explanation-2: -The EOQ formula is as follows. EOQ = Square root of [(2 x demand x ordering cost) / carrying cost] Demand. The demand remains constant according to the assumptions made by EOQ. The demand is how much inventory is used per year or how many units are sold per year.
There is 1 question to complete.