Question: 1. The Economic Order Quantity (EOQ) is when the ordering costs equal the inventory carrying costs EOQ=V2xSxD H a) Identity and briefly describe the assumptions

1. The Economic Order Quantity (EOQ) is when the

1. The Economic Order Quantity (EOQ) is when the ordering costs equal the inventory carrying costs EOQ=V2xSxD H a) Identity and briefly describe the assumptions on which the Economic Order Quantity (EOQ) formula is based (20 Marks) Consider the following scenario: A private hospital currently uses 60,000 boxes of test kits each year at a constant weekly rate. The cost to order test kits is K 100. The annual inventory carrying cost for one box of napkins is K2 and the unit cost of one box of napkins is K8. b) What would the Economic Order Quantity (EOQ) be for the private hospital? You must include your calculation in the response. (15 Marks) c) If the private hospital orders the Economic Order Quantity, what would the time between orders (order cycle) be? You must include your calculation in the response

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