A company buys calculators at a price of $5 per unit. The holding cost of each calculator is $.75. The demand for the calculator is 20,000. The cost of ordering is $25.00.
I need to determine the EOQ, cycle time, and annual ordering cost. Can you please show me the right equations to use, then space down four or five lines so I can cover up your answers and work the problems myself. That way I can compare my answers to yours to see if I'm doing it right.
Again, the three calculations I need to do are:
1- Determine the EOQ
2- Determine the Cycle Time
3- Determine the annual ordering cost
Given: unit price of calculator: $5
Holding cost = $0.75
Demand = 20,000 calculators.
Ordering cost = $25.00
We have to compute EOQ, cycle time, and annual ordering cost:
1) EOQ =
Where D = 20,000 (annual demand)
C0 = ordering cost = ...
Economic Order Quantity, Cycle Time and Annual Ordering Cost are investigated. The solution is detailed and well presented.