(i) Calculate the EOQ (ii)  Calculate the average inventory (iii)  Calculate the total annual ordering cost (iv) Calculate the total annual inventory cost (excluding the purchase cost)

Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Chapter16: Lean Supply Chain Management
Section: Chapter Questions
Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...
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The following information relates to Unique Ltd for the year 2020:

Annual Demand                                               408,375 units
Annual cost of Holding                                     $1.50
Annual cost of placing an order                        $500

(i) Calculate the EOQ

(ii)  Calculate the average inventory

(iii)  Calculate the total annual ordering cost

(iv) Calculate the total annual inventory cost (excluding the purchase

cost)

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