A toy manufacturer uses approximately 45000 silicon chips annually. The chips are used at a steady rate during the 350 days a year that the plant operates. The annual holding cost is $3 per silicon chip, ordering cost is $140, and lead time is 5 days. 

Determine the annual cost if company uses optimal EOQ instead of current order quantity of 3000 units. 

Answer rating: 100% (QA)

The formula for EOQ is EOQ 2DS H EOQ 2 45000 140 3 19365 This suggests that the best order quantity ... View the full answer