How to determine the eoq and average inventory


For supply item HM, Bertha Company has been ordering 130 units based on the recommendation of the sales person. Who calls on the company monthly. The company has hired a new purchasing agent, who wants to start using economic-order-quantity method and its supporting decision elements. She has gathered the following information: Annual demand in units 500 Days used per year 500 Lead time, in days 30 Ordering cost $125 Annual unit carrying cost $20 Determine the EOQ, average inventory, orders per year, average daily demand, reorder point, annual ordering cost, and annual carrying cost.

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Accounting Basics: How to determine the eoq and average inventory
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