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    Find Economic Order Quantity

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    If a company sells 2000 units a year, what is the EOQ in terms of dollars and units if order costs are $60/order and $1 per year per unit for storage? How is the EOQ figured when quantity discounts are applied?

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    If a company sells 2000 units a year, what is the EOQ in terms of dollars and units if order costs are $60/order and $1 per year per unit for storage? How is the EOQ figured when quantity discounts are applied?

    where
    D is annual demand (units)
    Q0 is quantity per order
    C0 is cost per order
    Cc is carrying Cost of inventory (dollars per unit per year)

    Q0 = √2 x 2,000 x 60
    ...

    Solution Summary

    This solution is comprised of a detailed explanation to find Economic Order Quantity.

    $2.19

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