Question: For a product satisfying Economic Order Quantity (EOQ) model assumptions, the annual demand is 9000 units, the purchase cost is $40/unit and the inventory holding
For a product satisfying Economic Order Quantity (EOQ) model assumptions, the annual demand is 9000 units, the purchase cost is $40/unit and the inventory holding cost per unit per year is 20% of the purchase cost. The ordering cost is $300 per order.
Question: Calculate the economic order quantity (optimal order quantity) to minimize the annual inventory cost, based on the information above and then round off optimal Q0 to the closest multiple of 10 (for practical purposes).
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