Question: describe the economic order quantity (EOQ) model as a tool that could be used to determine the optimum level of inventory. Describe the benefits and

describe the economic order quantity (EOQ) model as a tool that could be used to determine the optimum level of inventory.

Describe the benefits and costs associated with holding inventory.

Calculate the EOQ in the following scenario:

  • An office supply store sells 7,200 cases of pens a year and purchases a case for $50.00. The cost to place an order is $60.00 and the carrying cost of the pens in the warehouse is 20% of inventory value.

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