Economic order quantity? if the supplier offered a price of, Ask an Expert

Management Studies

A service garage uses 120 boxes of cleaning cloths per year. The boxes cost $6 each. Ordering cost is $3 and holding cost is 10 percent of purchase cost per unit on annual basis.

Determine:
a. Economic Order Quantity?
b. Total cost of carry cleaning cloths? (excluding purchase price)
c. Average Inventory?
d. The annual cost of ordering and carrying cloth?
e. If the supplier offered a price of $5 per box and if all 120 boxes were ordered at the same time, should the garage take the order?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M979720

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