Chapter 12
Lowe's sells a certain style of battery weed eaters. They sell 40 per month. The weed eaters are purchased for $80 each and the annual carrying costs per unit are estimated to be 30% of purchase price. Ordering costs are $25 per order. Note: Given monthly Demand. Need to calculate Annual Demand. Need to calculate carrying cost per item. Stated as a percentage of purchase price.
EOQ Sq Rt 2DS/H TC=Q/2 x H + D/Qx S
What is the EOQ (Carry out 2 decimal pts)
What is Total Cost using EOQ?
If the buyer orders 50 weed eaters on every order, what is the impact on Total Cost vs EOQ Total Cost?