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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
...
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