Consider an inventory system model where the annual ordering cost is $ 20,000 per year, and...

 

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Consider an inventory system model where the annual ordering cost is $ 20,000 per year, and the total annual holding cost is $40,000 per year. Suppose the current order size that management has arbitrarily set is 1000 units at a time. Which one of the following statements is true about the optimal order quantity (EOQ)? (Hint: Use the Economic Lot Size model illustrating the total cost and cost variation per unit time) Consider an inventory system model where the annual ordering cost is $ 20,000 per year, and the total annual holding cost is $40,000 per year. Suppose the current order size that management has arbitrarily set is 1000 units at a time. Which one of the following statements is true about the optimal order quantity (EOQ)? (Hint: Use the Economic Lot Size model illustrating the total cost and cost variation per unit time)

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