Franklin Company purchases 4,500 units of Widgelets each year in lots of 500 units per order. cost of placing one order is $22, and the cost of carrying one unit of product in inventory for a year is $8.80.

Required:

1 What is the EOQ for Widgelets?

2 How many orders for Widgelets will Franklin place per year under the EOQ policy?

3 What is the total annual ordering cost of Widgelets under the EOQ policy?

4 What is the total annual carrying cost of Widgelets under the EOQ policy?

5 What is the total annual cost of Franklin's inventory policy for Widgelets under the EOQ policy?

Answer rating: 100% (QA)

1 Economic Order Quantity EOQ Sqrt 2 x A x O C Where ... View the full answer