You are purchasing a product that has a monthly demand of 200; you will purchase this product
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Question:
You are purchasing a product that has a monthly demand of 200; you will purchase this product for $25.00 and the carrying costs are estimated to be 18%. The labour involved to issue the order is $11.00; other costs associated with issuing the order ordering total $5.00.
Show your calculations:
Calculate the Economic Order Quantity
Calculate the EOQ if only the purchase price changes to $35.00
Calculate the EOQ if only the yearly demand changes to 19000
Calculate the EOQ is only carrying costs change to 14%
EOQ = 2RS where R = Annual Demand
KC S = Cost of Ordering
K = Carrying Costs
C = Purchase Cost
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