The sales of mouthwash at MARKAL Pharmacy over the past 6 months have averaged 2,000 cases per month, which is the current order quantity. Markal's cost is $12.00 per case. The company estimates its cost of capital to be 12 percent. Insurance, taxes, breakage, handling, and pilferage are estimated to be approximately 6 percent of item cost. The cost of of placing an order is $38.00. What is economic order quantity? What is the total inventory cost under economic order quantity? Compare the total cost savings with the current purchase order of 2000 case per month. 

Answer rating: 100% (QA)

To calculate the Economic Order Quantity EOQ we can use the following formula EOQ sqrt2 D S H Where ... View the full answer