One of Cranston's main raw materials is plastic pellets, which he buys in 100-pound lots for $0.35 a pound. The annual consumption is 8,000,000 pounds. Within a wide range of order sizes, order and shipping costs are $120 per order. Transportation costs are $1.50 per year for 100 pounds. Calculate the EOQ for plastic pellets. If Cranston used the EOQ model, how often would he order pellets?

Answer rating: 100% (QA)

To calculate the Economic Order Quantity EOQ for plastic pellets we ca... View the full answer