Question: Economic Order Quantity points ) : A small metal framing shop uses welding rods at a uniform rate. The owner orders the rods from a
Economic Order Quantity points:
A small metal framing shop uses welding rods at a uniform rate. The owner orders the rods from
a local supplier when the annual demand is about pounds. To place an order, he has to
spend about $ for the phone call and other paper and manpower costs. The cost of a welding
rod is $ pound and holding costs are assessed based on a annual rate.
a How much should the owner order each time to minimize his annual cost?
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