Inglis Company uses 312,500 pounds of sucrose each year. The cost of placing an order is $30,
Question:
Inglis Company uses 312,500 pounds of sucrose each year. The cost of placing an order is $30, and the carrying cost for one pound of sucrose is $0.75.
Required:
1. Compute the economic order quantity for sucrose.
2. Compute the carrying and ordering costs for the EOQ.
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...
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Step by Step Answer:
1 2 Carrying cost CQ2 075 X 50002 ...View the full answer
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Related Book For 
Cost Management Accounting and Control
ISBN: 978-0324559675
6th Edition
Authors: Don R. Hansen, Maryanne M. Mowen, Liming Guan
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