A product has an annual consumption of 1,000,000 and the ordering cost is $100 per order

Computer Science Mar 18, 2023

A product has an annual consumption of 1,000,000 and the ordering cost is $100 per order. It costs $0.20 to hold a unit in stock for one year. Calculate; a) EOQ. b) How many orders are placed in a year? c) What is the time difference between two orders assuming 365 days in a year? d) What is the total relevant cost, i.e., sum of holding and ordering costs? e) If the company orders equal monthly amounts, how much extra cost is paid?