A firm regularly purchases a raw material whose cost and usage profile mean it can appropriately...

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A firm regularly purchases a raw material whose cost and usage profile mean it can appropriately be managed using the economic order quantity model. Currently the firm incurs total holding costs of €20,000 per annum as a result of ordering 10,000kg of raw materials each time it places an order. Currently the firm places 10 orders each year at a cost of €500 per order. If the firm decides to instead order at the economic order quantity, the savings it will make in total holding costs per annum is closest to:? A firm regularly purchases a raw material whose cost and usage profile mean it can appropriately be managed using the economic order quantity model. Currently the firm incurs total holding costs of €20,000 per annum as a result of ordering 10,000kg of raw materials each time it places an order. Currently the firm places 10 orders each year at a cost of €500 per order. If the firm decides to instead order at the economic order quantity, the savings it will make in total holding costs per annum is closest to:?

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To find the optimal order quantity EOQ that minimizes the total inventory costs we can use the formu... View the full answer