# EOQ, Floor Space, Inventory Cost

(2). The question to solve.

A Company purchases wholesale, stores, and then sells at retail four different products used by customers. These four products are Prod1, Prod2, Prod4, and Prod3.

The following tabled data is relevant...

The annual carrying cost is 12 percent of the unit cost and Company has only 500 square feet of floor space available.

(a) Determine the optimal order quantities (EOQ) for these items given there is only 500 square feet of storage space.

(b) Once the order quantities have been determined, warehouse floor space must then be partitioned into four distinct areas because of highly restrictive environmental conditions required for each item.

(c) What is the total inventory cost (holding cost + ordering cost)?

(d) What would be the savings per year if unlimited floor space was available (unconstrained)?

please help with attached question.there is a similar example below the question.

thanks

https://brainmass.com/business/inventory-management/eoq-floor-space-inventory-cost-351126

#### Solution Summary

The expert determines the optimal order quantities for the storage available. A Complete, Neat and Step-by-step Solution is provided in the attached file.