Using the economic order quantity eoq formula how many


You are managing a company that stocks and distributes hardware. The company employs two purchasing agents who receive combined salaries of $90,000. They process 6,000 purchase requests per year. Average inventory in storage is $600,000, and the total cost of running the warehouse is $200,000. You are told that the company purchases 5,000 hammers per year at a cost of $5.34 per hammer. a. Using the economic order quantity (EOQ) formula, how many hammers should be ordered at one time? b. If the hammer vendor stated that it would charger $5,00 per hammer if you ordered 200 or more at a time, what should you do?

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Operation Management: Using the economic order quantity eoq formula how many
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