Question:
Economic order quantity; safety stock
Assume that the company desires a safety stock of 500 gallons.
Economic order quantity; tabular computation
Cortez Chemical, Inc., requires 20,000 gallons of material annually; the cost of placing an order is $20, and the annual carrying cost per gallon is $5.
Required:
Determine the EOQ from potential order sizes of 300, 400, 500, 600, 700, and 800 gallons by constructing a table similar to the one appearing.