Explore BrainMass

Explore BrainMass

    EOQ Analysis

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Tiger Corporation purchases 1,200,000 units per year of one component. The fixed cost per order is $25. The annual carrying cost of the item is 27% of its $2 cost.
    a) Determine the EOQ under each of the following conditions: (1) no changes (2) order cost of zero, and (3) carrying cost of zero.

    © BrainMass Inc. brainmass.com June 3, 2020, 10:38 pm ad1c9bdddf
    https://brainmass.com/business/accounting/eoq-analysis-241967

    Solution Preview

    EOQ = SQRT[(2 x demand x ordering cost / carrying cost)]

    1) no changes = sqrt(2 x 1,200,000 x 25 / 27%*$2)

    = ...

    $2.19

    ADVERTISEMENT