Question: The current order quantity for Electric Power bars is 100 bars. The order cost is $10 per order, the holding cost is $0.25 per bar

  1. The current order quantity for Electric Power bars is 100 bars. The order cost is $10 per order, the holding cost is $0.25 per bar per year, and the annual demand is 2,000 bars per year.
  2. Calculate the annual holding cost plus the annual ordering cost to get the total annual cost when using an order quantity of 100 bars.
  3. Calculate the EOQ and the total annual cost for this order quantity.
  4. How many orders per year are necessary when Q = 100? How many orders per year are necessary for the EOQ in part b?
  5. Graph the annual inventory cost (IC) using MS Excel. Show the holding cost, ordering cost, and total inventory cost as a function of order size Q.

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