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Reducing Total Inventory Costs Using Economic Order Quantity

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Lakefield Ice Ltd. sells 25,000 windows per year. The carrying cost per window is $3.70. Currently they order 1,000 windows at a time with a fixed cost per order of $38. If they switch to using economic order quantity, how much can they reduce their total inventory costs?

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This solution includes 1 reference. The expert examines reducing total inventory costs using economic order quantity.

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Current expenses: 1000 x 3.70 = 3700 + 38 = 3738

EOQ: 2 x 25,000 x ...

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