Question: You are purchasing a product that has a monthly demand of 200; you will purchase this product for $25.00 and the carrying costs are estimated

You are purchasing a product that has a monthly demand of 200; you will purchase this product for $25.00 and the carrying costs are estimated to be 18%. The labour involved to issue the order is $11.00; other costs associated with issuing the order ordering total $5.00.

Show your calculations:

Calculate the Economic Order Quantity

Calculate the EOQ if only the purchase price changes to $35.00

Calculate the EOQ if only the yearly demand changes to 19000

Calculate the EOQ is only carrying costs change to 14%

EOQ = 2RS where R = Annual Demand

KC S = Cost of Ordering

K = Carrying Costs

C = Purchase Cost

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