P15ndash5 eoq analysis tiger corporation purchases 1200000, Ask an Expert

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P15–5 EOQ analysis Tiger Corporation purchases 1,200,000 units per year of one component.

The fixed cost per order is $25. The annual carrying cost of the item is 27% of its $2 cost.

a. Determine the EOQ if (1) the conditions stated above hold, (2) the order cost is zero rather than $25, and (3) the order cost is $25 but the carrying cost is $0.01.

b. What do your answers illustrate about the EOQ model? Explain.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91398938

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