A Company Decides to Establish and EOQ for an Item

question 2

Short Answer

A company decides to establish and EOQ for an item. The annual demand is 400,000 units each costing $8 to run, setup costs are $32 , and inventory carrying costs are 20%. Calculate the EOQ in units.

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Definitions:

Compensate

To provide something, typically money, in recognition of loss, suffering, or the need fulfilled, to make amends or give an equivalent.

Andrew Ure

A Scottish doctor, scholar, and industrialist of the 19th century, known for his contributions to the study of economics and manufacturing.

Human Relations

The study and management of interpersonal relationships, focusing on how to improve these relationships for the benefit of individuals and organizations.

The Philosophy of Manufacturers

An outlook or system of thought concerning the principles, practices, and ethics of producers and manufacturers.