Rocco's manufactures 1,600 units of product per year. The cost of materials for these products are R40 per unit and the cost of placing and receiving one order is R50. Annual carrying cost is 10% of the inventory value. Calculate the Economic Order Quantity for Rocco's.

Rocco's manufactures 1,600 units of product per year. The cost of materials for these products are R40 per unit and the cost of placing and receiving one order is R50. Annual carrying cost is 10% of the inventory value. Calculate the Economic Order Quantity for Rocco's.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 6E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...

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Question

Rocco's manufactures 1,600 units of product per year. The cost of materials for
these products are R40 per unit and the cost of placing and receiving one order
is R50. Annual carrying cost is 10% of the inventory value.
Calculate the Economic Order Quantity for Rocco's.

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