Thomas prater is the purchasing manager for the headquarters of a large insuranc

Question

Thomas prater is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastest-moving inventory The cost of each unit is $105, and the inventory carrying cost is $8 per unit per year. The average ordering cost is $29 per order Jays for an order to arrive, and the demand for week is 117 units. (This is a corporate operation, and there are 250 working days per year). What is the EOQ? units (round your response to two decimal places).

Explanation / Answer

EOQ = (2*Annual demand*Ordering cost / Holding cost)^0.5

EOQ = (2*5850*29/8)^0.5 = 206 units

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