The 24-Hour Mart operates a chain of supermarkets. Its best-selling soft drink is Fruitslice. Demand (D) in April for Fruitslice
1. Calculate the economic order quantity in April for Fruitslice. Use the EOQ model, and assume in turn that
a. D = 7,200; P = $36; C = $1.20
b. D = 7,200; P = $36; C = $1.80
c. D = 7,200; P = $6; C = $1.80
2. How does your answer to requirement 1 give insight into the retailer’s movement toward JIT purchasing policies?
Economic Order Quantity
Economic order quantity (EOQ) is the ideal order quantity a company should purchase to minimize inventory costs such as holding costs, shortage costs, and order costs. This production-scheduling model was developed in 1913 by Ford W. Harris and has...
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Question Posted: July 31, 2015 08:47:20