Independent Demand Inventory



Independent Demand Inventory

Question 1

The current order quantity for Paul's Pasta Pinwheels is 200 boxes. The order cost is $4 per order, the holding cost is $0.40 per box per year, and the annual demand is 500 boxes per year.

Calculate the annual holding cost plus the annual ordering cost to get the total annual cost when using an order quantity of 200 boxes.

Calculate the EOQ and the total annual cost for this order quantity.

Solution

Order Quantity = 200 boxes

Holding Cost per box per year = $ 0.04 per box per year

Order Cost per box per year = $ 4.00 ...