An Assistant Manager Is Reviewing the Costs Associated with the Store's

question 173

Essay

An assistant manager is reviewing the costs associated with the store's best-selling product.The data available follows:
Demand = 2000 units/year
Order cost = $80/order
Holding cost = $10/unit/year
a.The current order quantity is 125 units per order.What is the total annual ordering cost and holding cost for this order size?
b.What would be the EOQ and its associated ordering and holding cost?

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Definitions:

Behaviour Occurring

The manifestation of actions or reactions of an individual in specific situations.

Extinction

In behavioral psychology, the gradual decrease and eventual disappearance of a conditioned response after the reinforcement is no longer provided.

Punishment

The imposition of a penalty or negative consequence following an undesirable behavior, aimed at reducing that behavior.

Behaviour Occurring

Actions or reactions of an individual or group in response to external or internal stimuli.