$7\mathrm{.}9$ Practice Problems

Problem $7\mathrm{.}1$

A retailer sells three products $-A,B,$ and $C-$ details of which are shown in

Table $7\mathrm{.}13.$ Assume a carrying rate of $30\%$ per year.

What would be the economic lot size if the retailer does not want to invest more

than $$10,000$ in these three products at one time?

What would be the lot size if you assume the ratio of unit cost of the product to

its carrying cost is constant?

Answer:

The feasible EOQs that satisfy the budget constraint are $137,213,$ and $675$ units.

The multiplier is $0\mathrm{.}624,$ and $$ is $0\mathrm{.}468.$