Janis has demand for 40,000 desks p.a. and the purchase price of each desk is $25....

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Janis has demand for 40,000 desks p.a. and the purchase price of each desk is $25. There are ordering costs of $20 for each order placed. Inventory holding costs amount to 10% p.a. of inventory value. The supplier now offers us discounts on purchase price as follows: Order quantity 0 to <5,000 5,000 to <10,000 discount 0% 1% 1.5% 10,000 or over Required: Calculate the Economic Order Quantity. Janis has demand for 40,000 desks p.a. and the purchase price of each desk is $25. There are ordering costs of $20 for each order placed. Inventory holding costs amount to 10% p.a. of inventory value. The supplier now offers us discounts on purchase price as follows: Order quantity 0 to <5,000 5,000 to <10,000 discount 0% 1% 1.5% 10,000 or over Required: Calculate the Economic Order Quantity.

Answer rating: 100% (QA)

Based on the information provided we can calculate the economic order quantity EOQ for Janis desks using the following formula EOQ 2 D S H where EOQ economic order quantity number of units D annual de... View the full answer