Refer to CA5.1. Prepare a spreadsheet that proves using the economic order quantity minimizes total inventory ordering
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Annual demand ...................................................................... 2,000,000
Cost to place an order ............................................................ $ 9.50
Cost to carry a unit in inventory ............................................ 2.75
Economic Order Quantity
Economic order quantity (EOQ) is the ideal order quantity a company should purchase to minimize inventory costs such as holding costs, shortage costs, and order costs. This production-scheduling model was developed in 1913 by Ford W. Harris and has...
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Annual demand 2000000 Ordering cost 95 Ca...View the full answer
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Related Book For 
Introduction to Accounting An Integrated Approach
ISBN: 978-0078136603
6th edition
Authors: Penne Ainsworth, Dan Deines
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