ABC Corp. uses 20,000 half inch PVC tubes during a calendar quarter. Ordering costs are $180 per order and carrying costs are $6 per tube per quarter. The economic order quantity is?© BrainMass Inc. brainmass.com June 3, 2020, 7:57 pm ad1c9bdddf
The economic order quantity (EOQ) is given by following formula
EOQ = Square root of (2*Annual demand*Ordering cost/Annual inventory carrying cost per unit
In the above example demand is given per quarter and inventory carrying cost is given as per tube per ...
The solution shows calculation of Economic Order Quantity.