Discount-Mart, a major East Coast retailer, wants to determine the economic order quantity (see chapter 12 for

Question:

Discount-Mart, a major East Coast retailer, wants to determine the (see chapter 12 for EOQ formulates) for its halogen lamps. It currently buys all halogen lamps from Specialty Lighting Manufacturers, in Atlanta. Annual demand is 2,000 lamps, ordering cost per order is $30, annual carrying cost per lamp is $12.
(a) What is the EOQ?
(b) What are the total annual costs of holding and ordering (managing) this inventory?
(c) How many orders should Discount-Mart place with Specialty Lighting per year?

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...