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Calculate EOQ, number of orders required, interval of each order

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Ace Corporation presented the following data:
Monthly Usage is 400 units,
Cost per order is $20,
and Carrying cost per unit is $6.

Based upon above information, answer the following questions:

(a) What is the economic order quantity?
(b) How many orders are required each month?
(c) How often should each order be placed?

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Solution Summary

Solution depicts the steps to estimate EOQ, number of orders required each period and interval of each period for the Ace Corporation example.

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a)
Total demand=D= 400 units per month
Ordering cost=S=$20 per order
Holding costs=H=$6 per unit per ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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