A manufacturing company uses 1000 non-returnable special pins a month, which it purchases at $2 each. The manager has assigned an annual holding cost of 20 percent of the purchase price per pin. The ordering cost is $40 per order. Currently, the manager orders 500 pins at a time. How much could the firm save annually in ordering and holding costs by using the EOQ?

Answer rating: 100% (QA)

The Economic Order Quantity EOQ is the order quantity that minimizes the total cost of ordering and ... View the full answer