Task1. Real steel Inc. is initiating the inventory management program by using EOQ. Real steel needs fastener supplies to manufacture its products. The CFO estimates that the company will need about 250,000 cases upcoming year. The cost of storing cases is about $1.10 per cases. The ordering cost is $400 for a shipment.
problem1. What is the EOQ?
problem2. How many times will you order?
problem3. What are the shortcomings of EOQ? What is your justification?