The annual demand for an item of inventory is 125 units. The item costs $200 a unit to purchase, the holding cost for one unit for one year is 15% of the unit cost and ordering costs are $300 an order. The supplier offers a 3% discount for orders of 60 units or more, and a discount of 5% for orders of 90 units or more. 

What is the cost-minimizing order size? 

Suppose the monthly consumption is 12 units and the lead time is 3 months. What should be the reorder level in this case?

Answer rating: 100% (QA)

To determine the costminimizing order size EOQ Economic Order Quantity you can use the EOQ formula E... View the full answer